Martial Arts approaches to Training
/"Be uncontentious and no one can compete with you"Â (Dao de Jing)

Traditionally in China the army was filled by both volunteers and draftees. Resisting the draft often carried the penalty of killing the resister's entire family, so Chinese armies often represented diverse segments of the population. This fact and the cultural diversity of China naturally led to a wide diversification of approaches to the warriors' life. People expected to have to go to war, some trained for it from an early age and some did not. Again, differing views created different approaches to qi gong, or in this case military training
For convenience, I've broke the topic up into three main traditions.
The first tradition is trance induced fighting and is very old.  The idea here is that winning is more important than living. Winning is so good and loosing is so bad that it would be worse to come back a looser than to die giving it your all.  The best example of this is trance possession, war dances. A milder form is the haranguing that happens at sporting events.
The second military tradition would be training to build stamina and resist pain. If you imagine yourself suddenly drafted into the military at age 14, the sooner you could freely thrust a long heavy spear, the better for your survival. Training with weights and qi gong practices like Iron-t-shirt and forearm conditioning are all good examples.
The third martial tradition is the so called neijia (inner arts) which includes taijiquan,

Chinese generals sometimes called themselves Daoists.  Perhaps they were trying to show affinity to certain chapters from the Dao De jing like the one at the top of this post. There is no connection between generals who called themselves Daoists, and religious Daoist. They had a completely different job description.
In reality, many training methods fall somewhere in between the three traditions I outlined above. Shaolin quan is somewhere between the second and the third tradition, depending on how it is practiced. Taiji quan can be practiced with flaring nostrils and ferocious growls. It follows, of course, that in peoples attempts to preserve methods from generation to generation that these different traditions have often been combined or entangled, creating many hybrids and combinations of methods and views.