It is true that the energy we call qi is the fundamental building block of our world. In the first realm, we learn to feel and manipulate it. In the second, we learn to begin empowering our flesh and spirits with the energies of the world. In the third, we begin to wield it in truth, gaining a grasp for the manipulation of the world around us through the alteration of energy and material. I would quibble on some details, but the foundational theory is mostly correct.
Where I find myself in disagreement is their theories on the middle dantian and shen energy. As I have heard it, the leading position is that shen is an energy wholly derived from potent cultivators and spirit beasts through which their will is imprinted upon the world, which is composed of the lesser energy, qi. This is why conflicts between those of the fourth realm and above so easily alter or scar their surroundings. Shen, the scholars posit, is a semi-divine energy, existing above the base mortal world, the first step toward wielding the power of the Great Spirits. This is why it allows us to escape the shackles of the world and fly or alter the workings of the systems around us in ways beyond the brute force of the third realm.
This is wrong. Shen exists in the world around us, not merely as a side effect of potent spirits, but as another fundamental aspect of the material world. All forms of material and energy are qi when broken down to their fundamental state, but during my time under Guru Abhinavagupta, a man of great renown in the west, I have come to understand shen's existence in the world.
Men, beasts, and spirits change the world by exerting their will, their shen, upon it, this is true, but the world changes itself. We are not not as separate from material cycles as many would like to think. Shen is the energy of laws and reactions. When you strike flint to make fire, this is a miniscule application of shen. The patterns of winds which derive the weather is an application of shen. Shen is not the winds and rains themselves, of course, but the fundamental logic which drives them.
This is the source of shen's potency and power when used in mortal hands. It overrides qi because qi operates as it does thanks to the laws and reactions imposed upon it by shen. Now you may argue, is what I just described not the provenance of the third dantian? Sovereignty, Law, Truth - whatever you wish to call it?
I would answer that it is, and that imagining those things to be a third source of energy rather than a refinement of shen is the greatest failing of Imperial qi theory. Of course, the truth is that sovereignty is really just a difference of power. If it is said that a fourth realm wields Law as a mortal would a sharp rock, then it may be said that an Eighth Realm wields it as a shaped cudgel.