For those reasons, it's rather tricky to support an argument of an absolute prohibition by decree, IMO.
That's true Chris. One time when I was a kid, two young Catholic friends of mine were over during lent when my mom offered us all lollipops. We all took them, but I could see some hesitation in the older brother. Halfway through eating it, he said, "This is a lollipop, not really candy, right?" because he had given "candy" up for lent. By some interpretations and rationalizations his lollipop was not candy...
What did the Japanese that you read mean to you? "Strict prohibition" or something else less strict or prohibitive?
And if Osensei was a hypocrite, which did you think he thought would do the best for you as an aikidoist and for aikido as an practice, based on his body of writings and teachings? If you think he was just talking out of his a$$ when he said competition in aikido is "strictly prohibited" - why do you really care whether he said it or meant it or whatever? It just mean's he was full of it... Go and test your aikido skill against anyone who will meet your challenge. If it gives you what you are looking for, what does it matter to anyone else, including Osensei? You don't owe him anything do you?