If the point of nikajo/nikyo is to control uke's knee through the arm, and if this can be done without pain, then a pain stimulus may disguise poor technique. If all you're interested in doing is making uke drop to the floor then pain may be adequate (although see above comments about performing nikyo on the unsuspecting and seeing pain without the desired compliance). I tend to think there is more to aikido then that.
Jon can speak for himself. However - I've had people who have trained at Aikikai Hombu in Tokyo tell me that you shouldn't RELY on the pain to do the technique - the movement should do it - but - the you have to be able to create the pain because not everyone is going to move the way an aikido person will move - unless we're able to cause the pain (creating the compliance) joe bloggs might not realize that if he was in a dojo he'd have to go on one knee and "tap" to signify it's time to move on - he might need to get a bit of crunchy time on the forearm...
Not sure I get "controlling the knee through the arm" but yes, a well applied nikyo controls me and can provide significant ouch moments. Someone who doesn't quite get it might try to force the issue in the wrong alignment by applying more force, but that's not good nikyo - a good nikyo controls and can hurt.
there's dojo time and there's "just in case" time - and if you can't do the just in case stuff, the dojo time might be a waste of time.... Unless of course you're doing aikido for exercise and fitness.