KAMI : Thank you very much, Goldsbury Sama!
As so accurately explained by Peter G., we may, from now on, agree or disagree with competition, but no longer on the grounds of "The Master said so..."
(I never did like that!)
Actually, in the book Aikido
(Kisshomaru Ueshiba, 1958, under the direction of Morihei Ueshiba), translated by Kaz Tanahashi quotes Osensei in the back of the book under the chapter heading "Memoirs of the Master":
We ceaselessly pray that fights should not occur. For this reason we strictly prohibit matches in Aikido.
That seems pretty clear, says he doesn't want "matches in Aikido" which I would call competition, and gives a reason, but if you want to go straight to the horse's mouth, contact Tanahashi Sensei in Berkeley. I'm sure he would, as the scholar he is, be able to tell you exactly what wording Osensei used.
Also among the memoirs, same book, Then how can you straighten your warped mind, purify your heart, and be harmonized with the activities of all things in Nature? You should first make God's heart yours. It is a Great Love. Omnipresent in all quarters and in all times of the universe. "There is no discord in love. There is no enemy in love." A mind of discord, thinking of the existence of an enemy is no more consistent with the will of God.
Those who do not agree with this cannot be in harmony with the universe. Their budo is that of destruction. It is not constructive budo.
Therefore, to compete in techniques, winning and losing, is not true budo. True budo knows no defeat. "Never defeated" means "never fighting."
Second reason, from my interpretation. I doubt that he means you shouldn't compete because you might lose. My take is, in context with everything else he says in his memoir, is that in an aikido interaction should never end with anyone defeated.
Other than that I take from it that those interested in competing are not interested in what Osensei called "true budo