Nowadays most people who learn Tai-chi are for its health benefits, and skewed towards middle age. Young people are more active and would more likely to choose a more competitive form of martial art, like boxing, TKD, Muay Thai, or MMA. Those who prefer Chinese martial system and prefer ring-fights can choose practicing san-da (散打), a kind of amateurish stand-up fights weighing more on point scoring then knock-out. Hence, most talks about tai-chi as a fighting system are mostly academic in nature, of nostalgic rather than present-day interest. This however is NOT the case in mainland China, where fighting spirit for traditional martial art is still flourishing.
From a competitive-sport angle, traditional martial art is flourishing too. In addition to the all-inclusive san-da form (which nowadays is getting popular round the world where Chinese martial arts are practiced, incidentally tai-chi practitioners [who are usually middle-aged plus folks anyway) seldom take part), each martial art form has its own tournament, and with rules improving for more and more entertaining fights. For tai-chi tournament, please check up my previous post Tai-chi combat training in China.
Another reason for the flourishing of fighting spirits among traditional martial arts in China is due to the prospering security industry in China. In many establishments in China (including the most common one: hotels), security guards who know how to fight are needed. For the martial arts form that have moved towards sports (like Judo, karate, TDO or even Muay Thai), the official system of coaching are more towards tournament fights. On the other hand, in traditional martial arts, it is still anything goes, or can still be anything goes. Some time ago, I checked up the website of a famous lineage master of I-style in Beijing and noticed that they offer all kinds of programs to train fighters, including residential courses for a couple of months, for very defined objective. And you know what, one important selling point is that the academy is liaised with many companies and can therefore find jobs as security guards for students! In other words, after, say 3 months of training, a young man get can a professional security job with the necessary skill. So, next time, don't meddle with a security man in mainland China, nor meddle with one who learned traditional Chinese martial art there, because they mean business!