In Real Life, gunfights often revolve around cover and lines of fire, which are dictated by terrain and thus inherently unpredictable, making Gun Kata's statistically predictable and memorizable positions and lines of fire an Awesome but Impractical notion. Also, the dynamics of actual gunfights involve a combination of flanking, positioning, and suppression fire, which puts emphasis on teamwork and combined arms tactics, something that is completely opposed to the concept of Gun Kata.
The close range version looks more like a plausible martial art, until you realise that if one of them shot from the hip, the other wouldn't be able to reach to stop it. Depending on the gun, the recoil would probably hurt, but it sure beats getting shot. To do this part of Gun Katas what justice it deserves, there are indeed special gun holding techniques in Real Life intended to minimize a chance of said gun being kicked from one's hands (as often happens in the movies where a gun is introduced through the door about half a hour before the rest). One of those is... falling flat on your back. This actually provides you with a fair unobstructed firing position while breaking away from immediate melee contact; you can imagine how that move would screw a Cleric in the movie.
Gun Kata also ignores a very important thing about firearms: they are very loud. Even one gun discharge that close to someone's face could deafen them for life - the dozens fired off in a long fight would have them bleeding from the ears. Needless to say, this all gets a Hand Wave because of the Rule of Cool.