MMA is competitive. Competitive fighting is not the same as reality situations: http://martial.jessecrouch.com/2009/03/mixed-martial-arts-and-competitive.html
But, because it is competitive, you can learn a lot from real-time fighting. You can train this with other arts of course, it's just not nearly as emphasized in most.
MMA is a sport, It has rules and regulations and is great to learn when you want to compete. But traditional martial arts are base on real fighting techniques used in time of war or actual confrontation. However, many traditional martial arts today are so washed down that it is pure crap, a good example are the Mcdojo's out there. They teach techniques that won't necessarily work in real life situations. I've heard of champion tournament sparrer getting beaten up or killed by street thugs. True traditional martial arts are still as deadly as they were a long time ago. They are based on techniques that can kill or maim a person but nowadays it is very rare to find a true traditional martial arts style.
As for MMA, People wanted to see how one style will fare against another style so the concept of MMA was created. And it eventually evolved to the sport that we all know and love today. However, MMA fighters now just do mostly a mixture of Muay Thai, Brazilian Jiu-jitsu, wrestling, boxing, and kickboxing. There are some fighters out there who do other styles such as karate (Lyoto Machida and George St. Pierre), San Shou (Cung Le), Combat Sambo (Fedor), and Judo (Karo). But in the end, we all found out that it's not the style that determines the winner, it is the fighter.
So the advantage for MMA is that it is a sport, it's a great sport that true athletes join to test their skills and talent. I love MMA but I would never use it in a real life confrontation. Would you pull guard if a guy had a knife on you? Or would you try a double leg takedown if he had a knife?
And the advantage for TRUE traditional martial arts is you get to learn the philosophy and discipline and learn techniques that can apply to real life threatening situatons but you can never use those techniques in a sport because they will be considered illegal (such as eye poke, groin strike, etc.)
MMA is mixed martial arts. MMA training is 100 times better than training in only one style. You are training in every aspect of fighting,
Many traditional martial arts are so watered down now days that your not even learning the traditional art. Most traditional styles are based on one area of training either just striking, or just grappling. Very few traditional styles cover both. and you need both. Also many traditional styles do very little, or even no live full contact sparring, which is the only way your going to get better, especially if you are training for self defense, street fighting, or full contact competition like the sport of mma.