Standard Disclaimer.. People should be used to firing from the the holster on command and with shooting and moving before they try to induce further stress..
now that we cleared that up....
The excersise bit is a good stress inducer.. but it is no way to make friends with your students.
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Here are some other ideas:
Shooting and moving causes stress for a lot of people, even after they have practiced it.. Add a time constraint and you are in business for sweat beads.
Throw in random fire orders (multiple targets with the BG being identified by a number.. while the person is walking in a figure 8 or something.. ie: "Gun #3!!"...) and you could have nervous breakdowns.
I've found that taking away the accuracy element and increasing the time and "dynamic" portions of the drill can exponentially increase stress.
Shooters are taught from day one to hit (or at least aim at) a specific point. If you hang a silohuette backwards amd tell someone that they are going to have one second to hit it while moving, on a beep from your timer.. it'll really throw 'em off gaurd the first few times.
Add conversation and props to your drills. A common LEO situation is the traffic stop.. put them about 2 steps from the target with a pad of paper and a pen. have them "interview" the target.. give random orders while they are interviewing ( "Challenge!".. "Headhsot!"... "Shake Hands!")... that'll stir blood, too.
You'd be surprised how many officers will tuck the pad under their arm or lay it down on the ground during their draw, rather than just dropping it.. or better yet using it to distract the BG by throwing it at his head.
For more ideas you might do a search for the "range Reports" threads that I started back in October or November (if they are still in the archives..) there are a lot of advanced drills in their as well.
BUT, if you want real stress... find yourself a good looking women who can outshoot your buddies and have her enter a friendly contest with them.....
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-Essayons