I think that's a modern interpretation of what "art" is. It used to be seem as something much closer to 'craft', or something you devote to learning and putting in practice decades to attain mastery and something like that. So martial arts would be really the craft and art of fighting, killing, defending, war and etc.

I'd suppose the admiration that people took in what the 'artmen'/'craftsmen' discovered and became capable of doing spawned, in turn, what is commonly tried to be pinned down as 'art', today.

My thesis on the OP is just that tradition and 'show' took over the chinese martial arts, then they got practiced and studied as something on the sky instead of practical art, and so it now loses to the more pragmatic martial art of today(that is, ignoring the spiritual aspect of it). But imagine centuries ago how much someone with training on the traditional martial arts could kick way more ass and protect his ground compared to a nobody. Even today someone without any training will most certainly have very little chance against a one trained in 'traditional martial arts', it's just not so specialized.

Interesting to note that Bruce Lee on his later years was making his own martial art that was meant to be practical and raw, there's various quotes of him talking about that, maybe the guys could pick that up.

another little detail, too. Is that MMA is built on top of what the old stuff discovered, and so, obviously it ends up with a much shorter road to travel to improve and etc.. The traditional guys could easily pick up from there and make their "mma with chinese characteristics" which could probably be kickass too or something :p

The only problem is, chinese martial art keep claiming that they're great at combat. When they quote the "art" part, generally they just want an excuse to say that "it's not we martial art not as good as modern stuff like MMA. We're just sparing people."

Oh, that's certainly delusional. As a kid, I learned a martial art, and looking back it's clear to me it was much more use as meditation than combat training.

I guess it depends on the martial art? The ones that emphasize sparring with full resistance have found practical success in MMA, such as Judo, Muay Thai, and BJJ. I don't think many people would say a trained mixed martial artist is not great at combat.