The remaining logical flaw (other than those that require the 'willing suspension of disbelief' in the first place) is in encounters with creatures who do damage simply because of the composition of their bodies - a creature made of an acidic substance who does damage simply by being in contact with an opponent, for example.
I think if I were DMing a d20 game in which a Monk was being played, I'd consider a house rule that unarmed attacks against such a creature would also do some minimal damage (maybe the minimum it would be possible to roll on the damage dice) to the attacking character until s/he gained the Ki Strike (Magical) enhancement. At that point, I'd rule that the Ki enhancement also protects the Monk against such incidental damage.