That's true...but my impression of Nishio Sensei (and Saotome Sensei) was their focus on training with live blades (wonder whether that's true in their dojos?)
Nishio Sensei developed an Iaido system called Aiki Toho Iaido, where most of the kata illustrate the principles of a specific empty-handed Aikido waza. The grading system for Aiki Toho Iaido is separate from Aikido.
Each empty-handed Aikido waza also has equivalent ken-tai-ken (bokken vs. bokken) and ken-tai-jo (jo vs. bokken) form.
In an article I read, Meik Skoss called Nishio Sensei's taijutsu and buki-waza a "true expression of Riai (union of principles) in Aikido".