We had a tanto class once where I got to attack our instructor with a balisong and an automatic stilletto style knife.
What a lot of people dont realise is that training with real weapons does not equal realistic training.
If I attacked in the way I would have to save my / take his life, both of us would probably have had to go for stitches and blood transfusions.
The way I attacked in class, with clear intent, clear commitment and clear follow-through resulted in both of us staying safe and uncut.
With a live blade you dont need a fraction of the commitment and force you need to injure someone empty-handed. Except for illustrating this to me in the practice, the value of training with live blades (over training/wooden knives) when neither party handles the blade in a realistic natural manner and neither party gets hurt is debatable.
I would say that I find training with fake blades to be more valuable, you dont need to inhibit the way you handle the blade and you can jam it into your partner with impunity if they dont manage to disarm you first. Sure you dont have the stress and fear-factor but thats where a good imagination and a realistic outlook on what you are attempting to accomplish comes in.