I don't think that helped them that much. You only need one guy to put the fears in to his local community enough to have the "best system". And suddenly everyone stops developing.
I have seen this with the street fighter factor. Has this terror reputation But he steps up to even a semi competent guy and gets killed.
I just think it comes down to comp format. Not everyone has to compete but without some type of active 1v1, a martial art is basically incomplete. And every (legit) martial art out there has some sort of 1v1 format.
That's how people get to "TMA hate". They usually just want to see some comp or sparring, and it's always a mixed bag. But that just requires further seeking. This is why a lot of TMA guys entered UFC, they wanted to battle. And we all know some worked out, some didn't. For some reason, a lot of great old TMA got thrown under the bus.
Weapon arts must and can be trained with a decent amount of aliveness. That was the case at Shaolin Temple for like the first 1,000 years. All the empty hand trchniques handed down from that long TMA tradition are pretty new compared to say spear or saber which go back to the BC age, but even older is Shuai Jiao > Jiao li > Jiao Di lineage.
Usually you can see the competition format in artwork. This one is from Northern China about 2,000 years ago.
Consider Krav Maga, which is a hybrid art based on TMAs that are known to work. Its founder was very skilled, but the Israeli military only recently began holding bouts, because people were starting to doubt it, and that's all due to the "too deadly" guys wearing camo and pretending to be special forces, and the "Civilian Krav Maga" craze/fad. Got to be honest a lot of people who do Krav have no idea of its origins, and have no basic grappling skill. But they love to punch air.
Consider Muay Thai. It's a TMA, with a whole set of training, music, dance traditions. Nobody disses on it because it's clearly effective.
FMA, another wicked art with hand and weapon techniques. As long as you go to a decent school, there is a competition element.
So what makes TMA hateworthy? I thinks it's as simple as "what are you selling?". I think most of us, if we joined any school and there was not at least some 1v1 option, would walk away.
And I think it's hard to name a TMA that doesn't. Schools sure, but actual TMA styles themselves? Hard to name one that is truly fake or has zero competitors, or relatively legit history. I remember Yellow Bamboo but that was afaik totally made up by New Agers. Ninjutsu (the real stuff) isn't made up either, but it's a minefield of BS unless you rely on good sources (and imho, some of worst sources are the schools themselves, you dont knoe who to trust).
Sorry for the long rant but I've had this "TMA sucks" argument for so many years. It used to really get frustrating, now that I'm a few decades into MA training I just point people to sources that I've spent some time vetting.