One of the class exercises I like is performing kata with your group (students in the same rank range) in front of the class and instructors. You get to put to use some of what you have learned and demonstrate technique appropriate to your level. It also gives you a whole slew of constructive criticism. Our karate-ka give a lot of good feedback. :) I like to think it's because we all strive for perfection in our karate.
One of our instructors articulated something very well that I now realize I have always subconsciously felt. When you judge, or focus on providing constructive criticism for others, you better know your own karate. Detecting technique improvements/deficiencies in performers makes you think about and better understand your own karate deficiencies. Sometimes there is a lot out of whack, other times there only a few comments; but there is always something you can use to improve yourself.
I definitely observed and learned a lot in this class. The hard part is remembering and then incorporating it all.