Getting back to the board-breaking thing... while I agree with you Tabias - IMO it's effectively a parlour trick that doesn't seem to bear much relevance to fighting application. It's also a waste of trees which impacts on the environment (although they do have reusable plastic boards now, but still a lot of demos I see use still use wooden boards).

But for the sake of discussion, let's look at some possible arguments supporting board breaking:

1/ A method of conditioning. It toughens up your hands cos hitting things like people's skulls with your bare fists really hurts! Japanese martial arts have this thing called "Tameshiwari" and the Chinese call it "Iron Hand" or "Iron Palm" training. However, the traditional form of Iron Hand training does NOT involve breaking objects. It involves striking a hard padded object, such as a Makiwara (padded striking post) or a canvas bag filled with gravel. But in this day and age there are other less archaic methods. I personally own a pair of focus pads which I call "sting pads." The contact surface is intentionally hardened with toughened materials. Well, I don't feel it anymore... Other devices like the Wing Chun Dummy allow for some hardening of the fists, forearms and feet - and again, doesn't involve breaking (although those dummies are prohibitively expensive).

2/ A method of teaching striking technique. One mistake that all beginners make is that they strike at targets rather than through them. Proponents for board breaking might argue that this exercise demonstrates the value of striking through a target. The problem with this argument is that, as debunked by Penn and Teller, the exercise doesn't necessarily require you to strike through the target per se. As long as you're striking at the correct angle to the board and aligned properly with the grain of the wood, breaking the board doesn't take as much force as one might think (as demonstrated in the video by the skeptic's wife and by Teller. From wikipedia:
"The practice of breaking is controversial within the martial arts community. It is common for public demonstrations to use specially prepared materials that break more easily, without informing their audience of this fact. Thus, the audience is given an impression that the performers are more powerful than they actually are." Penn and Teller also debunked breaking multiple boards at the same time, explaining how once the first board is broken, gravity pretty much does the rest of the work.

3/ Building self-confidence. I once spoke to a practitioner of Kyokushinryu Karate who told me that when he first started as a boy, he was really timid and lacked confidence. When his Sensei told him to break a board, he thought there was no way he could possibly do that. But Sensei snapped at him and insisted that he could do it and told him to believe it. He then went for it, and successfully broke the board. He told me that it felt so good and gave him the most incredible boost of confidence he'd ever felt. He knew it wasn't a practical technique for self-defence... but once he realised that he could break that board, he realised that he could accomplish anything so long as he put his mind to it. It reminded me of The Empire Strikes Back when Yoda told Luke, "Do or do not. There is no try." But having said that, there are obviously other ways to build confidence... like ya know, making your students competent fighters. IMO one of the more uplifting moments in martial arts training is realising that your techniques can work and that you can actually execute them... much like in the famous wax on wax off scene from the original Karate Kid.