In my opinion, physical fitness encompasses the following; cardio, strength, flexability, hand/eye coordination, and muscle/body control. All of these are required in some way, shape, or form in any martial art that one practices. There are different requirements in each catagory for different arts.
Kyudo, for instance, is a beautiful art that requires superb hand/eye coordination, therefore doing things to improve that fitness catagory is only going to improve the art. This is the same for any art. Building the fitness skills for the fitness requirements of your art is going to make you a better artist.
The difference is obvious. As a physically fit second dan in Tang Soo Do I am able to outperform others that are not as physically fit. When I test for my third dan, that isn't going to change. If I was a physically fit eight dan, I still could outperform a less physically fit peer.
Therefore, as an artist, I see physical fitness as an integral part of my art...a requirement for my art.
upnorthkyosa
PS - I do not, however, think that you have to be physically fit in order to be a martial artist.