That Technique which is more of a "Side bump" knee strike is quite an effective technique if done properly, I've bruised/cracked ribs with this technique in competition before, you aim for the floating ribs.
I think it looks weak due to the instructor not wanting to hurt his partner but it does really hurt if done properly at full speed and power.
when training in Muay thai many Camps don't train full contact all the time to prevent injury to its fighters etc.
Its only in preparation for a fight does the fighter get a "feel" of full contact to prepare them so its not a shock to get hit hard and prevent "freeze"
A man is but the product of his thoughts what he thinks, he becomes.