Done my first iaido lesson yesterday and my left knee still hurts like hell. Thought that with my suwariwaza experience, the drawing of the sword from a kneeling position would be painless. Wrong thought, perhaps at 50 the mind is over adventurous..
Iaido should ideally be studied on a hard floor rather than on mats and, it is perfectly acceptable to wear knee pads when doing so.
I study Iai as an integral part of my aikido and iai is always done on a hard wooden floor, knee pads (for me) entirely irradiate any knee issues.
Even if you're iai is done on tatami, still wear the knee pads.