This has been a very informative thread of discussion, and I appreciate Ralph, Bill, Carl and Andy weighing in on it. From my limited experience in Olympic style sparring, the focus appears to be on speed, it does not matter so much on technique. If I hit you as hard as I can without proper hip rotation, body mechanics it won't be as hard as a 70% maximum power technically good kick, IMHO.
For example, look at the lack of waist/hip rotation and kinetic linking in this series of kicks:
U.S. Olympic Trials:
@2:36, the kick was certainly not 100%
@3:03, ditto
@3:29, ditto
and the whole hour and a half of footage, contains much of the same.
I'm not putting any of this down, please do not take it that way. But from my perspective both sides are correct in their positions on full contact. Because you are trying to make contact within a scoring zone as many times as you can during the round, I think that the rules make it easier for less "quality" of technique, er go, less power, even if you are hitting as hard as you can.
Just my observation.
I've never been to an ITF competition, so I cannot speak to that end. However, from my experience in the "traditional" tournament circuits, K.O.'s are not disqualification, they are a win. Blood drawn is typically a D.Q. though, so it discourages uncontrolled and blind techniques (unless it is the BB divisions).
Really, I wouldn't want to get hit by an Olympian with a back kick or back wheel kick, but I'm honestly not that concerned about their round kicks. Not that they couldn't hurt you, but we spar hard enough in our dojang that I'm confident I can take one through a hogu. Depending on how you look at it, fortunately or unfortunately, the ruleset discourages the use of side kicks, which can potentially deliver much more power than a round kick. I say the ruleset discourages it, because it is difficult to score with it and not get hit yourself with a technically "inferior" round kick. Again, this isn't putting down the athletes, they have to adapt the technique to suit the rules.
I would like to emphasize that this is only my observation and limited experience sparring in this ruleset. I've seen Olympians fight in traditional tournaments and excel with good technique and hit with devastating power, and I know they weren't going full power. Greg and Doug Baker come to mind, both great fighters back in the day.