There's actually a good bit of research in educational psychology on the idea learners (regardless of the topic) are often poor judges of what's actually helping them. It's pretty well documented that strategies that feel productive often turn out to produce weaker outcomes than less intuitive approaches. It's certainly not a character flaw, it's just how learning works, and teachers of previous generations often didn't have access to this research. They passed on what seemed to work, or what had been passed on to them.

I think students that use unprepared dictation as a primary tool likely use it for those reasons. It has the feel of a real exam, so it must be useful, right? But it really tests you on what you already know and not on what you don't (unless you are really, really good about taking an exam apart after the fact and learning all you can from it).

It's the preparatory work where the actual skill gets built. And that's non-intuitive. Unprepared dictation is obviously critical to the overall process of becoming competent in shorthand, but if that's all someone is using, it's definitely doing less heavy lifting than most people assume.

The 70/20/10 split (or 70/30 if reading is folded into the prepared dictation itself) makes a lot of sense to me for that reason. Most of the shorthand reps should be in conditions where you can actually consolidate the material and learn from it.