I was sparring a younger student in both age and amount of years studying. He pounded me. The whole classnwas watching and of course negative comments went around about my performance. I'm an instructor and expected to give a better performance. My pride is hurt. How do I positively reframe this? Waaaaa.
On open mat Saturdays at Shen Wu does the situation ever happen where a new student rains down destruction
On a seasoned veteran?

Hahaha,

Whats wrong with losing? If you never lost, why would you ever be interested in getting better?

Timber,

What kind of sparring are you doing?

Mediumish contact. The other day we had one student working one single technique while the other was doing whatever he wanted. Then the students would switch roles equaling 2 rounds for 2 min.

Head gear, chest protector, cup, mouth piece

So no one at Shen Wu has ever been housed? Inconcievable!

Robert, in theory getting my arse kicked SHOULD make me want to do better but in practice it makes me a bit fearful especially when injuries occur. I need to use my hands so I can't be accidentally jamming fingers every week. Injuries cause me to be fearful of sparring again sometimes.

maybe train harder in a more realistic setting with better instruction

I'm not understanding your point garret. Would a "more realistic" setting" somehow minimize injuries and people getting beaten?

Everyone gets hit, thrown and submitted sometimes.

If you want to acquire realistic fighting skills, you must spar realistically, there is no other way. If you want to spar realistically, there is a constant threat of injury, and defeat, it goes with the territory. Being afraid of being injured will increase your chance of being injured just like fear of failure will increase the odds you'll fail. Everyone fails from time to time, it's how you handle the failure and what you learn that is important.

If minor injuries to your hands will cause you to miss work, and martial arts are just a hobby, you may not want to participate in fight training.

Timber , Tim said it better.
But to answer your question I think a more realistic setting to improve ones martial skill and fitness is to train in a combat sport , BJJ, JUDO, SOMBO,BOXING, WRESTLING, MMA etc or as mentioned in many other threads to train your style like these styles are commonly trained , ie with progressive resistance.
This does not mean people going balls out 110 % against each other nor does it mean doing some sort of choreographed partner routine or form.
Instead it means learning a technique or set of techniques and hopefully a principle or two and then trying to apply them in isolated and free sparring situations. Ideally there will be a mix of skill levels and body types to train with.
I would consider my training /sparring partners as teamates if you like and dont think there is any need for anyone to be beat down or pounded.As mentioned already injuries are likely but i think training in a sensible manner can reduce the severity and occurence. For instance learning to know when you are beaten , learningg to tap in BJJ, not spazzing etc

Yang Chen Fu and Chen Man Ching (Zengmanjing)
Are said that in order to cultivate soft energy a student must

"INVEST IN LOSS"

I remember at a jiu jitsu class a senior student telling me "I used to lose every time, then eventually I would win one, then a couple, then I started winning more than losing- now I am much better than before"

I think this is the idea of training- If I could win with out working on the art of technique there would be no reason for me to train, no art to study no technique to learn, no softness to develop.