I'm not sure how you've managed to make the leap to this conclusion? My students do what is necessary to end the threat in a training environment while an atmosphere of safety is maintained. Going for the 'knock-out' or for points is a sports thing because....what else are they going to do? In SD, the situation is evaluated and the appropriate course of action determined. That may entail retreat (though in many states, such as my own it is not a legal requirement. That doesn't mean that it still isn't a tactically wise course of action). For example, when your training your students is a typical 'free sparring' session;
- Do they always 'go for the knock-out'? Is so, they've limited there response options.
- Do they have the option and/or opportunity to retreat?
- Do they have the option of using an improvised weapon?
- Does there opponent have the option of pulling a weapon (planned or improvised)?
- Does there opponent have the option of having his buddies jump in to help?
- Are your students required to observe certain rules?
- Do your students always train inside the Dojang?
- Do your students always were their uniform?
- Do you take your students outside at all? In normal street clothing? On grass, asphalt, sidewalk, slippery surfaces, in the woods, a hallway, an elevator, a set of stairs etc?
If you aren't taking full advantage of all of the above then you might be preparing the student for a great sporting match, but not realistic SD. Although any physical activity brings about a physical risk, there is more to SD than going for a 'knock-out'.
My students may very well try a stun and run, attempt a knock-out blow, a joint lock, a throw, a choke or whatever may be appropriate to the situation. Using a BOB we can go for the eyes, throat or groin. Or train for hard brachial plexus strikes etc.
Another very important consideration that you aren't taking into account: While it is entirely possible to knock someone out with a well placed kick, it is one thing to be warmed up and stretched out and wearing loose clothing in the Dojang. It is quite another to try it in a dress in high heels, a pair of tight jeans, with a handful of groceries, a duty belt etc when you're not warmed up and stretched out.
Secondly, and even more importantly, when your students are 'going for the knock-out', I'm fairly confident that head gear and gloves are worn. Feel free to correct me if your students don't wear safety gear. Now a blow to the head with a fist in a SD situation isn't the smartest tactic. The chance of injuring the hand on someones head is fairly substantial even with a well placed strike. That is why boxer as an example tape their hands and wear gloves. I'll say it again, the chance of injuring your hand on someone's head/face is fairly substantial. If this occurs, depending on the severity of the injury, it could very well limit your options for further SD. Anyone here ever try to manipulate a weapon with broken knuckles? Or a cell phone, or car keys? I've broken a knuckle before and my range of motion in that hand was limited for an extended period of time. Given that manual dexterity is already limited while under duress, you've just made it even harder by busting a knuckle or two, or spraining your wrist on someone's face. And there is no way to know ahead of time whether or not he'll actually be knocked out.
This also doesn't touch on the possibility of blood borne pathagens the bad guy may be carrying. And now you've put yourself in a position of cutting your knuckles on his teeth or 'bleeding' him from the mouth or nose.
All in all, teaching your students to 'go for the knock-out' by using there hands to the head is not wise for the variety of reasons I've listed. You are actually putting them at risk while at the same time limiting there overall SD options. This is the difference between someone that is sport oriented and someone that is SD oriented. No disrespect intended, but these are extremely real considerations that sport methodology does NOT take into account.