I don't do my testing with anything other then the real world on the ground where the rubber meets the road. It don't matter what the numbers are if it doesn't do the job where it counts. I have never seen a dyno win a race,and I have won a lot of races and championships with out a dyno. When you think about it,what makes a better builder,someone that makes power on a dyno but doesn't win races,or someone that doesn't use a dyno,but wins races?
In answer to your question, what is better is developing the HP on the engine dyno, then letting that HP win the races for you.
As far as cross country racing like you did, as you know, that racing is 80% rider, 15% suspension and 5% motor. So when you were winning races, you were a good rider.
We have been through that with GNCC, Motocross and supercross and superbike. We have supplied engines to lot's in the above fields and sure we had lots of holes shots in GNCC, Motocross and supercross but if you have a 4 or 5 place rider on your engine, after the HP gets shown off on the start, their still a 4 or 5th place rider.
Real world testing is great, as long as your doing it with timers. The trouble with that is it's similar to a chassis dyno, lot's of variables especially with a CVT tranny. You could have gained 10HP at 1000RPM higher and if you run it with the same clutch setup as the 1000RPM lower motor, you might never see it. So yes doing engine development testing on the track can work, it takes a HOLE lot longer.
If your testing is "what feels faster" then that's just a waste of time period.
I've been building engines and racing for going on 30 years and what "feels" fast isn't always.
I remember the first time we ran a VFJ stg3 clutch on our test track, the customer had one of our 100HP std bore kits and we had ran it with a stock clutch and Dalton clutch kit already. Then put the VFJ stg3 clutch on and I made a pass. I came back smiling, thought we had something as if felt stronger. The guys asked me what I was smiling about, it was almost 6 tenths slower!!. We tested for 5 or 6 hours and the best we could get was still over 3 tenths slower then a stock clutch with a Dalton setup.
If we didn't have timers, I would have sworn it was quicker.
Been through that on MANY different machine's from car's, to ATV's, to sleds.
What feels' fast isn't always.