Karate as Character Development

I've been reading Shotokan History: A Precise History (which is actually a lovely, if overpriced, book) and it's interesting to me how much emphasis has been put on karate practice as character development over the past century.
I'm not confused by this trend; if I wanted to market martial arts practice of any kind to a suspicious public, especially if I was trying to sell an Okinawan art to a xenophobic Japanese public, I'd put any spin on it I could to make it seem like a good idea. I guess saying, "we're going to teach your kids how to damage one another really effectively" isn't the best advertising copy.
The part that interests me is this: how much truth is there to the spin? Is karate really good for character development? Here's my take on the issue.
First, there are a couple of possible ways to approach this question. One is historical - was karate training a method of character development in Okinawa in the 1800's? What about Japan in the 1930's? Japan post-war? I'm not going to address that issue - I'm no historian. But what about karate in modern America?
Karate training certainly isn't always good for character development. Just think back to the infamous Cobra Kai class from the old Karate Kid movie. Those kids weren't improving their character. And while most karate dojos were probably not like that one, I bet more than a couple were and still are.
What about the good, or at least better schools? What's the value of karate practice?
There are two layers of answers to this question. First, compare karate practice to any other disicpline where one seeks mastery of an art form. Think of all the lessons inherent in somebody working hard to learn dance, the piano, painting, whatever. You learn the value of patience and hard work. You learn about frustration and overcoming it. You learn about goal setting and consistency. Anybody think that's not character development? Anybody think that mastering Sanchin kata or the tornado kick is fundamentally different from learning to play the saxophone?
But there are a couple of aspects of karate practice that transcend the general value of mastering a discipline. The first is that karate (like most martial arts) forces the student to confront a fundamental fear, the fear of violence, in a way that practicing the piano does not. Learning to spar, learning to control one's emotions while sparring, learning to overcome that set of anxieties, are valuable lessons that you don't get from learning to skateboard or paint landscapes. I think that all else being equal a karate student will have an easier time dealing with interpersonal conflict and near-violence situations (like somebody yelling at you or threatening you outside a bar) than they would had they never trained.
Another benefit of karate practice is specific to the traditional dojo in America. The complex set of rules of etiquette (the bowing, the dress code, the ways you're allowed to walk, the rank consciousness) are all alien to the American student. In the dojo we are forced to be hyper conscious of our behavior, especially when we're new. I'm sure this doesn't translate into other areas of life for everybody, but I know it's made me more aware of my behavior in other situations. I don't mean that I bow to people outside the dojo, but I am more conscious of proper etiquette in meetings, around new people, and so forth. I don't always do the right thing, but I'm usually more aware of it when I screw up. Oddly enough, this aspect of training (sensitizing you to your own behavioral nuances in relation to others) is specific to the karate student outside Japan. If bowing etiquette and rank consciousness are already part of your culture, then utilizing them inside the dojo isn't anything special.
There are other benefits to karate training, of course. I'm a big fan of karate for general physical development (few other modalities hit so many aspects of personal fitness - balance, strength, conditioning, flexibility, coordination). Karate is probably good for learning to defend yourself - we can argue about the relative merits of reality based arts all we want, but karate teaches you more about self defense than painting lessons. And I would absolutely disagree with the notions some have put forth that all karate students are good people or that one with poor character cannot be good at karate - that's obviously ridiculous, and counterexamples abound. But I really do think that most practitioners are better people for having trained in karate, in a variety of ways.