At a basic level, the physiological principles are sound. Muscle tension creates force, and when you create this tension in opposing muscle groups, the force should create resistance that causes the muscle groups to respond and get stronger. On the surface, it sounds good. And there probably is a certain amount of benefit to it. However, there is one major aspect that's neglected: the neurological aspect. You respond to exercise in a manner that reflects the way you train. With dynamic tension, you're not actually moving any external load around like you would in weight training. As a result, while your muscles are working very hard, you're not necessarily training yourself to do any functional work. And since the whole point of getting stronger is to move external loads (opponents, garbage bags, whatever), this functional aspect matters.
What I think Dynamic Tension is particularly good for, somewhat ironically, is conditioning. The extreme muscle tension that one can achieve undoubtedly causes the muscles to work much harder. Thus, the cellular metabolism is greatly increased, getting an affect very similar to intense conditioning work.
The way I currently use it: I do each of my forms twice (yes, I still do my old kung fu forms, that MA-nerd side of me never died). The first time, doing them "properly", full speed, crisp movements. The second time through, doing them with as much full body muscle tension as I can muster throughout every movement. And I'll tell you, I sweat like crazy and my heart is racing much more than when I run. Is it doing me any good? Well, I can't provide any objective measures that say it is. But I like to think that simply due to the sheer difficulty of it is.
But for my actual strength training.... it's good old weight training for me.
The Sanchin kata is pretty much the same thing, I think.
The Yi Jin Jing (Muscle/Tendon Changing Classic) and other forms of Chinese qigong are also great dynamic tension exercises. I don't think they'll build huge muscles/limbs (targeted weight training is of course a more effective way of doing that), but they definitely help build healthy ones (hence the name), and also give the heart and nerves a good, gentle exercise.
Correct me if I'm wrong (I've seen several variations of the Yijin Jing,) but the Yijin Jing that you're referring to, is also called the 12 Deva Exercise?
Hung ga is a so-called "external" art, but the YJJ my lineage practices is as close to Taiji-flavor as I have seen so far. From what I read, the more probable YJJ origin stories are linked to Daoist priests...seems to make sense given the so-called "internal" feeling to these exercises. They are definitely quite different from most other Hung Ga exercises.
This is very close to the version I practice. Doing this set will leave you covered in sweat and give you a worked out feeling, and barely raise your heart rate above resting, one of the signs of a very efficient aerobic exercise.
Note the old school tiger lunges. I love tiger lunges.