Personally, I don't like it, and I don't see it lasting.
For one thing, they brought in a bunch of elite-level WKF competitors and told them to fight full-contact, which left them throwing sloppy, overextended strikes thanks to all that training they've done to meet WKF scoring criteria. For those who don't know, in order for a punch (for example) to score in WKF, it has to make contact at full extension--meaning there is nothing left to make impact at that point--and then draw back. Older competition circuits, for comparison, required you to make contact "with control" (stopping short), but the technique had to have enough extension left to actually do damage if you didn't stop it. Essentially, WKF has messed up the range of fighting for everyone in it. Some of the guys doing KC have different competitive backgrounds, or train for more than just WKF-style competition, but MAN have I seem some of them overextend to try to land with power at the range they have trained to be at.
Additionally, I don't see that this is really anything that people outside of the sport karate community have any reason to care about. The karate-based kickboxing of the 80's was better, skill/technique-wise, and if they want to see kickboxing, they can watch that old footage, or K1 footage, or Glory, etc., so what value does this really add for the average combat sports fan? And as Tayski pointed out, there have been attempts to do something like this, before--some of which were decidedly better than what we're seeing from KC--and they fizzled out. The only thing this has going for it is Bas Rutten's endorsement, and we are getting to a point where a lot of MMA fans, sadly, don't even know who he is, so how long will that last?
To be honest, I also don't particularly care if it fails, because this is still just an attempt to promote the karate meant for school children, instead of promoting the material that is more comprehensive, effective, and useful for those with an interest in MMA. The long range fighting thing in karate came from Kendo when karate went to Japan and became popular with high school and university students, which came along with a serious watering down of the art and removal of most of the stuff that made it effective. For the same reason, I don't care if karate completely flops in the 2020 Olympics, and kind of hope that it does, because that doesn't represent the karate I do, and honestly gives people the wrong impression of what karate is supposed to be. If they had set KC or the Olympics up to focus on the close range fighting methods of karate, then we would be on to something, but that isn't as flashy and exciting. I've considered trying to set up a circuit for that, but honestly, Arizona is just terrible for such things--we don't even have a knockdown competition circuit out here--and I don't have the clout or capital to set up something larger.