Carnies gonna carny. People need to stop falling for Cornette's shtick as well, annoying as that can be.
With that said, this is not an either/or dilemma. Wrestling is definitely performance art, it just so happens that the performance is simulating combat sport. You have to respect both in order to really get ahead in the business, as the qualities you see in top stars or the biggest earners are often from both the performance and sport ends of the spectrum (gimmick/character, physique, in-ring ability, athleticism, promo ability, etc.). You can definitely get ahead trending toward one end or the other (Bret Hart himself, when discussing his rating system, said that he was much more of an in-ring guy who happened to have believable, grounded promos as opposed to a Hulk Hogan, an outsized character with theatrical in-ring work), but every wrestler worth their salt needs to have qualities from both categories, and respect the ability needed to do well in both arenas.
Thing about this argument is, Cornette gets it and Grace doesn't, it just so happens that Corny is being (as usual) a massive dikk about it. For all his discussion regarding verisimilitude and sport in wrestling, he understood that HIS SPECIFIC ROLE meant that he couldn't be tough, a well-rounded technician, or any of that. His contribution to the sport side of wrestling as a character meant acting as promoter and manager, annoying his opponents, and eventually getting his ass kicked from time to time (basically, everything we want to do to Don King types). Grace apparently either doesn't understand or care for the sport aspect of wrestling, and it completely undermines everything you do by just blatantly and obviously calling it fake without any regard for how that side of wrestling affects how we suspend disbelief and care for the action in the ring.
It's just dumb. Marks in the ring again and all...