Chi Sao is a sensitivity two person martial art training drill that is used primarily in Wing Chun Kung Fu. There are other forms of Wushu that have incorporated Chi Sao but for the most part we will be focusing on traditional Chi Sao or energy hand as it is known translated into english. By sensitivity it is meant as a practice drill between two practitioners by means of touching of hands and wrists through multiple set patterns of movements. These movements involve back and forth, up and down, and circular patterns. The key is to anticipate your opponents movements and to stay with them as they make simulated attacking movements. The movements have Chinese names like Tan Sao, Pak Sao, Jing Jang, Fook Sao hooking hand, Jut Sao or jerking hand.
To do proper Chi Sao, it takes a great deal of time to develop the sensitivity. The drill make you more efficient at reacting by reflex to an opponents actions. So to sum up Chi Sao it is a reactive tool, or defensive in nature. Once attacked Bruce Lee felt you were no longer on the defense, you are now the attacker.
Jeet Kune Do used the Wing Chun Chi Sao drills and then they were modified to be more combat like by eliminating the circular chi sao drills. Bruce felt that the formed patterns were holding back students and practitioners by limiting them to a closed circle. Bruce only cared about how a technique or drill worked in combat.
In 1971 Bruce Lee decided to completely eliminate the Chi Sao drills all together. He believed that even his combat modified Chi Sao as taught in his Oakland California school was putting a damper on the effectiveness of JKD, and that it was too difficult in combat to read the moves or energy of an opponent. He would rather attack the attack to begin with regardless of what energy the opponent was giving you.
In the end Chi Sao is an effective tool for defensive sensitivity training, but not for real world fighting in Jeet Kune Do where the focus is on the offensive after being attacked or threatened. While Chi Sao can be a useful tool like many other traditional moves of Kung Fu, it was modified and or eliminated for Jeet Kune Do.