Wow, that is a really interesting concept.
I think that it is primarily a matter of personal beliefs and opinions. I suppose it depends how deeply you buy into the philosophy. In the end, we're learning what is intended to be a battlefield art, i.e. a system for hurting another person either for defense or offense (because even in defense, there is a point when you go into offensive mode). I believe that why it was created is only relevant if you personally believe the philosophical portion. This dictates whether you can use TSD in a purely offensive situation (i.e. when the other guy has done nothing to you)
Then it is up to whether you believe in competition. I think that I can say with confidence that at least 90% (if not 100%) of the TSD organizations out there encourage competition through fighting. If they did not, there would be no sparring based tournaments. But there is ALWAYS sparring at tournaments. We're just talking about a different level of sparring, since I assume that these matches are not to the death! Look at even the greatest of martial artists, they were all involved in varying levels of fighing competitions. I personally have no objection to people using TSD in an organized tournament/fighting scenario. You are not using it real aggression, you are using it to test your skills against another person. Personally, I wouldn't do it, because I don't like the idea of getting my brains beaten in.
So to me, there are two other things to consider. 1) The venue....do you have any personal issues with you being in there or with using your art in a gentlemen's club.
and I would say more importantly 2) What chance do you have? I have full faith in my art, but it is a self defense art. And what are really the chances that you're going to run into another trained martial artist on the street? Very small. But in the ring, that guy IS another trained fighter....and as much as it pains me, TSD IS NOT GOOD FOR RING MATCHES. It may have been at one time, but in this day and age with how MMA is conducted....TSD will lose. Those fights go to the ground....a trained MMA fighter will have a much better ground game and probably a more robust standing bag of tricks. Now, your Dojang may be very expansive in its training, but an MMA fighter will probably just have more....think about it, training with no forms, no requirements, just what works and fighting EVERY CLASS, against different styles.
And that is one of the reasons why so many people around here believe so strongly in cross training. TSD has a lot and if you study deeply enough and are open minded enough, it has it all....but most Dojangs don't teach it all. So without some Judo, Wrestling, a touch of BJJ, maybe some Aikido, and the boxing basics....I personally would NEVER step into the ring with an MMA fighter.