No way I could do something like that, but here's what I think it would take for each "character" in a machine-driven fight scene:
1) A finite list of possible moves, each with different durations and with fluid transitions.
2) Reaction to other character(s) in the scene.
3) Ability to sync the moves to music (optional). Heck, the whole program could just create random sequences and look just as good regardless of music, but how cool would it be to see punches/kicks sync'ed with bass hits or something...

I think it would be tough to do this well and not look computer-generated. What this animation lacked in dimension it made up for in creativity.