Think of power management as being akin to volume control on a stereo system. Low volume is suitable for safe, controlled practice. The higher the volume, the more unpredictable the outcome. Martial arts are meant to be lethal, so full power means killing somebody and no one wants to do that.
If you do not actually make contact, there is no way of knowing whether or not your martial art even works. Pulling punches is just bad practice. A punch must impact a body. A throw must take the person to the ground. An arm break must tax the joint.
Full contact is commonly assumed to mean full power. This is not accurate. A full power karate punch would kill. A full power judo, ju jitsu or aikido application would break a limb or concuss the attacker.
