Flower of Battle suggest a different solution to stealing initiative - activation cost depends on your proficiency, not opponent's PER. It moves between 5 and 3 CP. Both of you may then add dice to your REF from your combat pool for the roll of "who hits first" - meaning that if the opponent spends all his dice as Alan did, he opens himself to this more than if he left few dice behind.
It also suggests you add length penalties to REF rolls for determining who hits first...
And yes, it is perfectly possible to do the "iaido" thing where the hero waits for opponents' attack and then moves in to attack faster. After all, it's all a valid tactic...
As you can see, the system is quite complex: and we haven't even gotten to Twitching (Zwerchcopteeeer! you hide few dice into your hand before attacking via cut, the opponent must defend successfully - after the attack you declare twitch, show your hand - if you have more dice than your enemy has successes, you actually keep initiative, attack the opposite side and add double the dice to your next attack) or favouring (oooh... let's see: you send your GM a note about your character holding shield in specific area to cover it better and pay some dice... if the enemy attacks the area you are focusing, your dice investment gets doubled for purposes of defence)...
...so many options.
Yet often what works best is the easy approach. Defend well, attack weak, keep dice in reserve to scam the opponent, search for opening.