Although live blades are very dangerous I think they can be an aid to training if used very occasionally and only when both Uke and Nage are very experienced in that technique (it even helps to practice with a wooden tanto first), and not with a 'scrappy attitude' or with Uke or Nage who is tired. The reason I say they are useful is that, as a Nage it really makes you scared to face a real weapon and it takes a lot to overcome this fear and pull off a smooth technique (it was probably my tension that caused my earlier leg stabbing incident). However other than for 'shock' value (and also to impress upon newer students just how dangerous knives are) routine use of a live blade is best avoided - use them enough and someone is bound to end up hurt.
As far as I am concerned use of live blades for Aikido should never be done in a "class" situation. It should be done one on one in an environment which will not endanger anyone else and will produce a minimum of distractions. And frankly I can't see any advantage to using a live blade unless one is seriously and I mean seriously into combat application.
I trained for a time in a style of eskrima. My teacher had trained very intensely in the Phillipines with the Grand Master of the style. They were very serious about their art and did do practice with live blades. My teachers arms were covered with scars. If one is training with live blades and there is any degree of intention in the attacks you are going to get cut. So you have to ask yourself whether it is worth it to you to take that kind of risk. Since most people will never in their lives use a technique for self defense, it doesn't seem to justify the risk for most people.