I think, when I spent a year writing one flash fiction piece per week, I did get a little bit better at it, but one of the biggest effects was that I became a better reader/viewer/audience member. I paid more attention to what stories were doing and why. While it's certainly possible to just sit back, brain off, and let stories pass through you, I enjoy recognising these little pieces that the author is going to bring together ahead of time. If it is in the story, it matters, so how is it going to matter?
One other thing I've encountered is the fact that nothing ever goes smoothly for characters. The straight line plot leads straight from boredom to boredom through unbelievable dullness. If something is going right, it won't go right for long. If there's a plan, there will be a hitch. Things go wrong for characters that have to keep going forwards. That's what stories are. You can end with all of the wrongness turning on the villain in one glorious moment - where the wild babboon picks up the gun that the mental patient loaded with the silver bullet just as the werewolf comes through the door - or you can have it all go horribly wrong for your heroes so that nobody really wins, but unless something is going wrong, your story is not going right.
Mokalus of Borg
PS - I wish I could bring more of that to my stories.
PPS - I have plenty of ideas for settings and characters. What I need are plots.