It cannot. Do IS-teachers of all sorts strike you as a particularly religious bunch? Sagawa?
Does aiki improve any religious practice you do?
A disciplined physical practice can of course serve as a "meditation" method of some sort of course, towards certain goals, like counting the breath or using a rosary. But that would really be an almost banal point.
I'm not going to go into this here, but in Daito Ryu there are explicit relationships between Japanese Buddhist and Shinto practices/philosophy and the techniques/worldview of the art itself.
These relationships are also prevalent in in traditional forms of Japanese flower arrangement and music. These are just two that I am in some way familiar with. In fact, pretty much any traditional form of Japanese art should have these philosophical links IMO.
My point is that Daito Ryu is not "merely" a vehicle for "Internal Strength" training. It is an art with its own traditions, history and "spiritual" (For want of a better word) worldview.
A great post, by the way!
On a separate point, has anyone posting on this thread ever actually trained with Alan Ruddock or Henry Kono?