I've known shirt grabs were a problem ever since I got taught to "jersey" someone (ahh…hockey)

If you do it right you can trap their arms and cover their head at the same time leaving you free to punch at your leisure.

Interesting that you mention shirt-grabs. There are several ways to get out of those; one involves inflicting serious striking damage, two involve just getting out of the grab, and another involves an armbar of sorts. Problem is, most people don't know any of this. Grabbing someone's shirt is a great way to get him off balance and set him up to eat several punches- or set him up for a nasty take-down. It's one of those odd attacks that can catch people by surprise very easily- and as you say, it's not something that most people consider.

As for not holding back- my teacher put it very well in a class I took with him last year. He said, basically, "Don't worry about what happens after the fight." He did this after some people got a bit queasy about the fact that one of our releases from front bear hugs (arms pinned) involves biting someone on the neck. After some amused mockery of people with "vegetarian issues", he pointed out that there is always time to worry about "those issues" later- when the fight is done and the attacker is lying bleeding and broken at your feet (hopefully!).

In a street fight, it's a question of survival. Dealing with lawyers and questions of "proportionality" become pretty irrelevant at that point. Unfortunately most modern justice systems seem to have a hard time understanding that if you're the victim of an unprovoked attack, then it's very difficult to exercise restraint at that point…

I have noticed that a fairly big disadvantage is merely wearing a shirt. It gives the attackers something to grab, hold on to and use to knock you off balance. I do realize that there will almost never be time to take off your shirt in order to fight, but it is an interesting factor that few seem to consider.