But this brings me to another theory of mine - none of this stuff was ever intended to be used against other, well-trained, fighters. The superiority of a martial artist's training stems from his comparison against untrained, unconditioned, non-fighters
I realize you did say that this was just your theory - but seriously?! This is just a ridiculous statement. Back in the day they trained for real because they fought on a regular basis - with other "fighters" for their lives. Be it to defend family, propriety or just to prove who's family's style was the best.
Systems changed and grew BECAUSE they fought other "fighters" and perhaps lost or saw something durring their fight that they felt they liked and so augmented their system to include or defend against it. Military doesn't train to fight civilians - they train to fight other military forces (and don't go and say the fight guerilla's who stem from civilian forces). On the same token - fighters don't train to fight untrained people - they train to fight other fighters. Otherwise you're not a fighter - you're just a bully.
"To know you don't know is best.
Not to know you don't know is a flaw.
Therefore, the Sage's not being flawed
Stems from his recognizing a flaw as a flaw.
Therefore, he is flawless."