They were all good people practicing there and were all sincere about what they were doing. They enjoyed their practice immensely. So from that point of view it is all good. However, although it may be wrong to label what they were doing as 'wrong'. It was only 'right' within certain limited parameters.
I agree with you totally... But think right and wrong are terms which have limited use when describing aikido. Either it serves the purpose or it doesn't, martially either it works or it doesnt, with shades of grey, as indicated in your post using slightly different language. What has always interested me is relating those things that make it work martially with non physical applications.