Sim Fu (and other games, like Pool or Chess) are actually 'hidden skills' in themselves. They increase as your Sim practices. The way for a Sim to become better at winning martial arts tournaments is to spar with other Sims rather than learn from the book or practice with the dummy. They need 'practical tournament experience' as well as 'theoretical knowledge of how to hit another Sim'.
The same is true for a level 10 logic Sim who learned through books and the telescope - he'll get beaten in a chess tournament by a Sim who has a higher hidden Chess skill through playing other Sims, even if that other player is only a level 5 in logic.