That said, I find it somewhat ridiculous to suggest that "aikido failed him." In a very specific sense one might say that his teachers failed him, or rather, failed to prepare him. In a larger sense Mr. Lau may have failed himself by not training with the necessary mindset. But the idea that "aikido" is not "real-world" effective, but "aikijutsu" is, strikes me as the same one-dimensional thinking we see here time and again.
For starters, there is nothing in the "aikijutsu" examples of sankyo and munadori ikkyo that aren't part of basic
Iwama style aikido. (Although of course, cuffing uke at the end of the technique is not a typical Iwama practice.
) As I mentioned in a thread just last week, the Tokyo riot police practice Yoshinkan, and have made it work for years.
The solution is not to write off "aikido", but to find a dojo (aikido or otherwise) that offers what you need.
I think there's a few things that need to be taken into account when reading this article. First, this is from 1986. The amount of information available to us about Aikido and its history is hugely different today than it was then. Draeger's assertion that 'do' was purely for personal development and 'jutsu' was practical applied martial art was still king (at least in the west) and this is from BB mag.
Expanding on that a bit, when Bernie broke away from Aikido and started using the term "Aikijujutsu" it was in large part a way to emphasize that what he was focusing on was different from what you were seeing (particularly in NW) Aikido. Bernie was getting a huge amount of, "That's not AIKIDO!!!" from the aikido community. It was also a time when there were lots of politics and crap going on in the US Aikikai. Bernie got tied of it, and decided to step out of that and do his own thing. The name change therefore reflected a different focus in the training, a broadening of the curriculum and a stepping outside of the hierarchy of the various 'mainline' factions of US Aikido.
As for Aikido failing him. I understand your argument, but you do need to realize that Aikido was being sold as a nearly invincible way to neutralize attacks. Further, in this region, Bernie was one of (if not the) senior dude in Aikido. He had trained very hard for quite a few years and been recognized for that by Hombu. The fact that he couldn't make what he had been taught work for him in the very real situations he found himself in, must have been very difficult to take. His focus (for better or worse) shifted to finding the tools he needed to make him and his partners safe. In the same way that George doesn't require LEOs who come to his Defensive Tactics classes wade through 10 years of Aikido basics before they find something they can apply on the job, Bernie started looking for what he could get to work quickly and what he could teach effectively. So while a lot of it was still recognizable as Aikido, it was in fact different.
With the stronger association of the term "aikijujutsu" with Daito Ryu (and to a lesser extent Yanagi ryu) we've kind of dropped it in favor of "aikibudo" which feels like a better fit for how the art has progressed and the current focus.
Oh, and Bernie's finger locks still hurt like hell...
Edit note: I don't want to imply that I'm a long time student of Bernie's. I have only trained with him a few times. I do train under Neil Yamamoto who Bernie left in charge of Icho ryu when he retired from teaching regularly. I'm sure anything I got wrong in the above will be brought to my attention ASAP.