Keep in mind, I am a devoted (but open minded) Taiji Player with a life long connection to martial arts and the past 25 yrs to Taiji (almost exclusively) .
Some basic reasons why Kung Fu is considered less effective than some of the Martial Arts presently in the spot light today such as MMA.
All arts have their weaknesses and strengths. Arts must evolve with the environment and the time, failure to do so may make a once effective style less than that.
Often some current Kung Fu stylists refuse to see this point. Kung Fu has always been a fighting art and some lines remain true to their original purpose and continue to adapt. Others do not and have lost much of what was reality based and is needed to survive in today's world. Other aspects of true Kung Fu have been lost or at least diluted due to the fact of extreme and difficult training methods are not welcome by many in today’s want it fast and want it easy society. Many arts have had offshoots leaning towards the sport side like judo and jiu jitsu (the skills displayed in the sport versions still represent martial techniques in much more controlled arena).
Traditional kung fu has also seen such a split. Modern Wushu possibly the most recognized child of Traditional Kung Fu is taking much of the attention with its flash and acrobatics (unfortunately it is also less martial which equals less practical). Other off shoots like Sanda and the Open Style Grappling do provide a venue for more reality based competitions, but presently lack the popularity of MMA. When you think of big names in MMA, those individuals certainly possess martial skills. Most main streamers think of Kung Fu's big names and they relate to movie stars such as Jackie Chan, Jel Li and others not known for combat. I am a tremendous fan of both and they display an extraordinary level of skill, just not focused on martial.
Arts come in many flavors and the popular flavor today happens to be MMA. Closer looks at Kung Fu practiced the way it was intended show no signs of weakness, but few practice it that way and even fewer display their hard earned skills. Popular flavors come and go but chocolate and vanilla will always be around. Kung Fu and its Japanese sibling Karate are more like the chocolate and vanilla whereas MMA has not earned its place on the permanent menu yet, but it may and that is a good thing (I also believe it should). It creates a venue where even with its rules it does represent an element of realism. Time will tell. This brief explanation has excluded mentioning many other traditional martial art categories. This does not indicate their lack of effectiveness, I just do not have room to include them. Lastly, for those who say that Kung Fu is to deadly to be in the ring. If it is a complete art, it should at least be effective in any environment.