I have competed in both boxing and wrestling and I am now training in brazilian Jiu-Jitsu. I have watched many No Holds Barred competitions, like the UFC, and it is clear to me that Aikido and it's techniques and it's way of training do not prepare anyone to actually fight. I know that Aikido practitioners talk a lot about concepts like spirituality, harmony...etc. but I also hear people talk about how it is a pratical means of self defense. Aikido does not have practical striking techniques or any REAL matwork at all. I would like to know how Aikido can be used as self defense if you cannot grapple or strike.
I understand the feeling you must have when seeing Aikido for the first time, or trying it and hoping for the feeling of effectiveness to be gained from practicing the technique.
I'm not going to criticize you or your attitude like some other posters, just explain how I saw things. Maybe it will help, and if not, I hope you find what you are looking for.
I used to do TaeKwonDo and Aikido regularly. I dropped aikido to do TKD and practiced that for a few years. I've since dropped TKD mostly because of time constraints. TKD was great. The kicks and punches were quick, effective, and rather easily learned. With practice, even my crescrent kicks, axe kicks, and spinning back kicks were fast and accurate. The sense of empowerment was exhilerating and I really felt I was learning something. I was confident (and a little cocky, being younger) and in the best shape of my life.
TKD, and I suspect a few other martial arts have what I call a fast "ramp up". You learn the basic punches and kicks, and spend years perfecting them until they are muscle memory and as easily executed as breathing or tying your shoe. Your immediate gain from these arts are huge, and in time your technique is very effective.
Aikido is not one of these arts, at least not for me. The devil is in the details. How you hold your opponents arm, where you grab their limbs, the small angles to really bring the techniques into their most effective forms, take a very long time and a lot of patience to develop. It also must happen in a cooperative environment where you and your partner are dedicated to learning the technique effectively together, whereas in TKD exercise such as sparring are more adversarial in nature. I call this a slow "ramp up" because it really does take years and lots of cooperation to develop them to their maximum potential. Maximizing the art is what makes it effective, and that comes in a long time, not a shorter time like other arts. This does not mean that Aikido only works if your oppenent cooperates, but that you need a cooperating partner to learn the moves well.
Ultimately, my point is that in the time it takes to master Aikido to its most effective state, the Aikido practitioner has aged, possibly by a decade or two, and no longer considers the "tough-guy" and "effective fighting" approach to be important. There is so much physical to learn in Aikido, and really the whole time it's your mental prowess that is growing.
A lot of people see combat tournaments unwise or childish displays of ego. But like you, I agree that Aikido as a martial art should be able to hold its own in the ring against other arts, and I'm sure there are practitioners out there that can make that happen, but the time to make it to effective levels of Aikido tempers the ego and the need to prove one's self in contest.
The early developers of Aikido had other martial arts backgrounds. Most were coming from karate backgrounds, and Aikido was developed as an extension to this. For a true understanding of the martial arts, I believe Aikido DOES need to be supplemented with karate or another art. Otherwise, to me its somewhat akin to painting or photography. You can buy the equipment, go to the same place Ansel Adams went, and take the same picture he did. What have you accomplished? You copied someone. The early practicioners of Aikido EARNED their aikido through the understanding and extrapolation of their previous arts and their years of knowledge and practice. We copy what they developed. And we spend years learning what they developed so that we may better ourselves and our understanding. But in my eyes, to truly develop as a martial artist I think needs to go back and explore these roots of their previous martial arts, too. One must see where they have come from so that they can see where they are going.
Are you training for UFC, or just trying to be the best MA you can be and want to expand your horizons? I know a few guys that are "belt-baggers", who learn an art like TKD and quickly go get other black belts in karate, JKD, etc with the kick/punch knowledge. They're seeking title over effectiveness in my opinion, because they're not really gaining that much more from the similar arts, but that's them.
From your boxing and wrestling background you mentioned, I think aikido would be a great addition to your "arsenal", but please trust me on this, it's not something you can go in for a year and master, expect at least 5 years before you feel some "martial effectiveness" feelings, especially at your level of awareness of these things, but it will come, and I think you'll see the wisdom in the art, and when you see the means of utterly controlling someone and yet not hurting them at all, you'll realize the supremacy of the art in its final forms. I'm not there yet by any means, and may never make it, but I strive for it.
Good luck to you. Osu!