In a 1 vs 1 fight, why would Yang Kai even need to use the needle? No single territory lord would be his opponent, needle or no needle. He's just using it because employing the needle damages his own soul, which then gets a little bit stronger when the Soul Warming Lotus fixes the damage. So, the more he uses the needles, the stronger his soul becomes. Otherwise he could just turn into his dragon form, for example, and that territory lord wouldn't last two minutes against him.