If you're doing tanto dori with a live blade and no one gets cut...it just means that either the person with the tanto isn't really trying to cut or they aren't knowledgeable with a knife.
Yes, absolutely. Instead of using a live blade, why not just have uke attack as though it were really a sharp knife? Rather than using half-hearted sweeping motions and telegraphed thrusts.
I've often heard the story of someone going up for tantodori on a black belt test...and then seeing uke come out with a live (or at least dull metal) blade. You know what might be an even better surprise?
Uke walks up with a wooden tanto. They face each other and bow. They take up their stances. Uke moves forward -- and starts stabbing and slashing in an actual effort to strike nage.