I believe that one of the things that keeps me intrigued with Aikido (besides just being fun) is that it encompasses so much. It can almost be all things to all people. As you mentioned, and as I have heard from Saotome Sensei as well, Aikido principles can be applied to the fight situation (because "it is all Aikido" so to speak) but that is indeed the "dark side" of Aikido. That is not the purpose for which it was intended, but it can be there and be used if one has properly achieved some level of mastery over the basics. Admittedly, I am one of those people who thinks Aikido can be an effective self-defense method to a certain degree and I think it can be if that martial paradigm is stressed but, on the other hand, I essentially agree with you. Aikido practice, as O-Sensei understood it by the end of his life, is something entirely different and has nothing to do with fighting or self-defense, it is about becoming that bridge between Heaven and Earth and Heaven and Hades.
I do not believe that practicing Aikido with a stress on that martial paradigm means that one is doing "wrong" or "bad" Aikido but it certainly is not O-Sensei's Aikido as he intended it to be later in his life. However, O-Sensei started in much the same way in the Aiki arts. Aiki manifests itself in many variations. I think that O-Sensei had to go through the years of practicing hard style in order to achieve the vision he did later in life. One cannot fly without first learning to walk. But what I am trying to wrap my head around is, why did O-Sensei think it was so important that we become these Avatars of the Kami in order to pacify them as the Three Peaches pacified the Kami of the Underworld? I don't now comprehend how our physical training with each other makes the Gods happy. Is it just because when we practice, we are happy (or, happier, anyway) so, therefore, we put off "happy energy" into the Universe and hopefully this will stop World War III? That sounds like too much hippy wishy-washy stuff to me.
Regardless of what *I* think, this is what O-Sensei thought and he tailored the practice of his Aikido accordingly. It appears to me that he trimmed his Aiki art down to the very basic or essential movements. This made things easier, or harder, depending on one's viewpoint of the practice. As a means of "softening the joints" this probably makes things easier. As a means of "self-defense" it makes things harder. So, your point about the "outer form" is well taken, it is apparent that O-Sensei's later practice of Aikido had nothing to do with "self-defense" so why try to fit a square peg into a round hole? Regardless, O-Sensei's Aiki took on many forms throughout his life and knowledge of the harder style is still out there, passed down through his students (pre and post war) who went after it, and, I think, is still an acceptable part of the Aiki way.