Kakushite,

You write, "And as a teacher, I see 4 options for any given kata sequence. A teacher can be taught:

1. nothing and chose to pass it on. (Lots of typical Shotokan)
2. a poor (useless) application and chose to pass it on. (Lots of typical Shotokan)
3. a good application and pass it on. (unfortunately too rare, but becoming more common.)
4. no application or useless application and choose to develop a good application and pass it on. (Also surprisingly rare, but hopefully growing as well.)

I have to add several other possibitlies:

5* Dozens of applications for each movement sequence, the underlying principles behind those applications and develop the student within that matrix of study.
6* Layers of kakushite (hidden hand) applications to sit on top of the Shotokan kata and develop the student to acquire them and the knowledge how to fit into attacks with those answers.
7* I also know there are other answers more esoteric than a few words would suggest.

Yes there are almost limitless videos and dvd's on karate as well as tons of youtube applications. Let me share two different Kusanku answers:

Tony Annesi - Kanku Dai - http://www.youtube.com/watch?v=ypIWCI6QORQ
Tony Annesi - Kanku Sho - http://www.youtube.com/watch?v=IBOzalRy7G4&feature=related

Now how good are they. They show some potential within those techniques, but that manner of execution is far too soft for my liking, and while instructional, the use of standardized non threatening attacks doesn't really show how the answers fit more rigerious attacks. BTW they do, but the presentation gives me problems.

In most cases the applications shown on youtube don't get beyond beginner level of understanding.

Those who have much more have little reason to give them to anyone but their students.

I can understand that.

Take Kyan derived Kusanku, whether Shorinji-ryu, Matsubayshi Ryu or Kashiba Juku (a derivative), Seibukan, Shobayshi Ryu or Isshinryu.

they all share a general resemblence, but the small details make vast differences understanding the applications. I.e. Isshinryu's vertical striking offers answers that training in the others will not use, and so forth.

http://www.youtube.com/watch?v=BsoMzz1-Wak

Here is another Kusanku video.