The use of body armour and head gear allows for heavy contact sparring with no hand or foot pads, its a development tool.
also the armour is light and still very much hurts! It allows the students to expierience 'shock' withoubt serious injury.
It is simply part of the 'kumite' we practise, randori (as I call it) involves no pads and you work to the level of contact you both wish, ie progressivly harder.
I agree that conditioning excersises are most usefull as are tai sabaki methods, and again we use both for overall development.