My guess would be that many American aikidoka simply equate the generic term "aiki do" with Morihei Ueshiba osensei's expression of an art he applied that moniker to. I don't believe he was the first to match up those two kanji with relation to a martial art.
I'd heard Daito-ryu aiki-jutsu referred to as "aikido" while in Japan a couple of years ago. I recall that the reactions to this fact ranged from confusion to outright anger among a few of my fellow Ueshiba-ryu aikidoka upon my return to the States! Pretty silly when you think about it!