I think that having martial arts in-game is a good idea. But not all martail arts are in Hand-to-hand combat. Some Martial arts styles deal with weapons.
Pure weapon martial arts is referred to as Kanji Ryu (Weapon Hand Way) in most academeys.
Empty handed martial arts (hand-to-hand) is called Karate, Way of the empty hand. Karate can also mean that the style uses weapons and hand combat, but not always. I think that fully developing hand-to-hand combat can have some faults, seeing as how it takes alot for a human body to block, and overcome the mechanical force of a weapon. This means that it would have to remain as a secondary, last resort kind of skill. On the other hand, I have seen people at the academey that I go to, break and bend metal weapons(Like Ninja-To and a half-size, steel katana). If the skill were trained enough to be a match for weapons, then I think it could be sombodey's primary profession that they specialize in.
Now I think it would be cool if for every weapon class, there could be a selection of different styles to choose from. This may sound a little confusing, so here's an example.
The modern fighting style: Isshin Ryu, is made up of two older styles, Gojo ryu and Shoen Ryu.
Gojo Ryu means: Way of the Tortise. The style uses slow, but powerful movements.
Shoen Ryu: Way of the Bird. This style focuses on fast, less harmful tecniques.
If I were persuing the past of a sword warrior, I would like to have the choice between a number of styles, that each have their own advantages in different situations. I understand that having a bunch of styles per weapon could be really confusing, and there would have to be alot of styles. Well, my solution would be to have one style cover a number of weapons.
The whole thing would probably be a bit to complicated and if it were to be added, it would be much much later in development.