I kinda see where both of you are coming from. But I'm pretty sure the combat it's not always going to be about 'speed'. Right now people are running around like crazy jumping and spinning but if that was the case then when the game came out there would be absolutely no point in playing a character that specializes in taijutsu. If I am a taijutsu character that can't have a combat with someone because the game doesn't allow me to then there is no point in doing so. I agree that there should be directional hit, but you don't really have to use it unless you want to, since some people could be characters that use distance as a fighting style. What I'm trying to say is that the directional hit could work, but it needs to be slower gameplay. As you said it's not even close to being finished and since it is going to be an MMO where there are many people fighting at once it could be problematic but there are ways of making it work. Here is the thing, I believe it would be a great way to immerse into the game and actually showing who is a good player using taijutsu. I wouldn't like having a character that I've been playing for 3 months to try and perfect him and out of nowhere someone lvls up his own character maxing his taijutsu ,or training and getting more effective at it (depending on the final's game system), to be able to be as effective as I am by smashing an attack button and being as effective as I am without any knowledge. And since this game it is said to be hardcore, well it's not easy to 2v1 in Naruto, it shouldn't be easy here. It can definetly work if there is some though and feedback into it. As I said, for me, the first step is to make the combat slower, running fast and jumping on walls and such shouldn't be able to be done while in combat, imo.
Btw, there is a 4 hit system, watch Absolver, it's a game based on martial arts, it's all hand to hand combat.