A culture of mediocrity is generated when we stop defining excellence in the art overall as the capacity to employ Aiki spontaneously and instead settle for technical excellence under controlled conditions as the apex of Aikido.
David, if one examines your thesis carefully, then the only "real" measure of excellence in aikido is to look at the the randori portion at the end of a graded test -- that's one of the few places we can "employ Aiki spontaneously." And I tend to agree with you. Handling multiple attackers causes one to react spontaneously from one's core -- and you put out what you've put in, in my experience; sincere practice leads to a sincere response.
The alternative would be to set them up for a mugging and see how they respond -- not very practical, and some people would get seriously hurt.
So, I wonder if you're viewing the "cult of testing" and "teach to the test" and interpreting it as mediocrity.... Grading for "technical excellence under controlled conditions" is the only practical way to compare the proficiency of different individuals -- how well do they accomplish the same tasks to meet a set benchmark for technical ability. And without the controlled conditions, people get hurt. But, if the only aikido you see is just teaching the grading requirements, then you are seeing only a fragment of what aikido is all about. And that's not right - there is a lot more to Aikido than that.