Surprised about no replies. Is the interesting discussion happening on some other forum?
Regarding the recommendation against solo practice:
So we know O-sensei did lots of solo practice, many people saw him. (besides the heavy spear work, lodging and un-lodging the spear into trees, we also have the empty hand "tree pushing" exercises as photographed.. which was called kokyu training.
So, it could be that his sentiment here is referring to a distinction between kokyu ryoku (needs solo practice) and aiki (needs partner practice). Not saying I entitrely agree, just saying that putative distinction could account for this discrepancy as we have seen it worded thus far.
As regard solo training, I think that Okumura was referring to the post-war meeting in which Tomiki showed Ueshiba some of the basic exercises that he had developed in Siberia. I notice that he mixes the references to those exercises with the competition issue, so it's possible that he had a dog in that fight.
Also, I'd note that what we're hearing is Okumura's impression of what Ueshiba thought - of course that's valuable, but it's also colored by his own perceptions of what ought to be happening. I notice that even when he talks about being in favor of a "Taiji-like" solo form it appears as if he's talking about forms practice rather than any kind of real conditioning.
He makes it clear in Part 2 that there were things that he didn't understand - and never understood, that ought to be understandable if you have the right background, so that may cast the remarks in a different light.