Whew, touchy subject. I'm going to go out on a limb on my first official post here, and admit to being one of the dummies who trains regularly with live blades. I work with very high risk juvenile offenders for a living, and the chances of my being attacked with a bladed weapon are extremely high. I can't afford to go into that situation prepared with anything less that realistic training. At our school with my students, we make live blade training a regular part of the curriculum. The art we practice is based upon the blade (from tactical folders up to and including the barong, kris, bolo, etc.), and although we use wooden and aluminum training replicas, we do knife tapping and line drills with live blades. It's kind of like the difference between practicing empty hand non-contact sparring and contact sparring (at whatever level of contact you choose)...I've seen way more people injured in non-contact sparring than in contact sparring. At some point in your training, you simply have to put on the gloves and as Bruce stated, get in the water. When the element of real danger is there, your whole mind-set changes. You are focused on the moment, what the Japanese martial artists call "Mushin". You can't let your mind wander, a less-than focused mind can cause real injury, but then again, we are practicing life saving arts here...we are therefore honing real life saving skills with live blade training. Now, we aren't stupidly hacking away at each other, the point is to develop sensitivity, real sensitivity, and we have found that without the live blade, the emotional and mental aspects that must be honed to effectively defend against the blade simply aren't being developed. We begin slow, then work our way up, according to the student's comfort level and pace...the point is to develop skills, not to send people to the hospital as a matter of course. We aren't crazy, we don't have scars we wear as badges of courage (in fact, no one has been hurt yet in many years of this training), but the live blade is an essential tool in our training. The key word here is "tool".
But then again, that's just me and my take on the subject...
"You must be the change you want to see in the world" Mohandas "Mahatma" Gandhi