Great reply Mike (great name too),
The question that you really bring to light is "what is kata?" I agree completely that it is a learning tool. In modern terms it can be called "bridging". Taking one techniques and flowing to another. We all perform kata to larger or smaller degrees. Anytime you take a movement and perform it in air, Kata!
In some arts, a kata can be only two to three movements. In others, several (some of the Chinese forms have over 50 in one set). I think that sometimes we get caught up in the tournament style comparison. As you stated, maybe the teacher has refused to or never knew the practical application.
I guess the partial purpose of my statement is, if you have a limited amount of time to train a student, in a military or law enforcement setting, you need to progress the student to the dymanic realm as quickly as possible. Most California police academys allow for only 60 hours of defensive tactics training out of a 6 month academy. And we know that less than 2% of these recruits will continue training in anything. Pretty sad huh!