It is true that our opponent can over extend, which is what I understand ki no nogary is about. Like in swordsmaship, you can always cut the hands of someone that over extend and keep your self out of range.
So yes there is no need for atemi, in fact in that case it would be contra-productive
But there is case where our opponent does not extend outside his balanced extension range. In that case not using atemi is as contra-productive as using them in the case above
I look at it very differently, so for me, whether or not things are more static (kihon practice) or more in movement (ki no nagare) doesn't particularly define anything about the use of atemi. For me, reliance on atemi is dangerous, whether one is using it to distract, unbalance, or to actually hurt. To use your example, if an attacker can attack in a centered way and I try to use atemi to unbalance them, there's always the chance that I will then simply become the attacker and have it used against me. I only "use atemi" when there's something about the moment that tells me it's safe, appropriate, and necessary, which to me, at least, isn't that often. Others feel differently, I understand that. To each their own.