Hi Roy, see my post on the 'other' thread for my disagreements.
Draeger draws some interesting distinctions between civillian and miltitary arts. He also makes some distinctions between Do and Justu arts...some of those distinctions don't hold up as well.
But to stick with Aikido, you could take the techniques of aikido, strip out any reigi or cultural items, start competitions with rules that pressure test the techniques, only keep the techniques that pass that test. But then I would question whether or not what you are studying is Budo.
This whole area is very subtle...judo is Budo...but it can also be practiced as 'just sport'. Junk the kata, forget the belts, test only through competition, forget the japanese terms, bowing, etc. You'd still have a pretty high percentage grappling art. But would it still be budo? Personally, I have my doubts, but I also don't know how to express the reasons for those doubts.
The aikido I've been taught does have a cultural componant. There are other arts that also have cultural componants...like silat for instance. But that is an indonesian art, not japanese, so for me it has similarities to Budo, but it's not Budo. But it is said that its quite a good fighting art...even with the cultural componants. Each person has to decide what they like, and go with that.
As to lacking in combat effectiveness...well, to go with the pressure testing idea, you should get on the mat with some of those you think are lacking...let me know how it comes out.