Realistic exercises as a substitute for wartime correction

Do militaries need a serious conflict periodically to prevent bureaucratic overreach?

No; realistic, unscripted exercises followed by honest analysis can expose and correct institutional failures without a war.

War breaks rigid routines by exposing which assumptions fail under pressure, but a serious conflict is not the only way to gain that institutional correction. Exercises can serve the same purpose when opponents are allowed to act freely rather than follow a scripted outcome. The critical step is honest analysis: organizations must accept inconvenient results and change doctrine, training, or procurement instead of protecting established positions.