Peter and David
My friends, I am reminded of that old story about the Indian Holy man who proclaimed that all was Maya "illusion" in the face of an elephant stampede. Of course the "illusion" flattened him.
Whether "real" or realistic, ideal or representative, if I hit someone with my yokomen they will know it. It will have sufficient power that no one will want to stand in front of it and take the hit. People will have to execute their techniques with some degree of correctness in order to not be crushed by the strike.
For me the point is that whatever we do in our Aikido practice, we must do it well, with power, speed, and intention. This is true of the attacks and it true of the defenses. If you train this way, constantly push the envelope, never stop trying to take what you are doing to the next level, then you are doing Budo. You will become more centered, you will develop some personal power, you will have some ability to defend yourself but will probably be less likely to have to. If street fighting is your goal then some attention to that issue would be advisable but the main components of being able to fight will be there already.
I remember Shioda Sensei's description of his encounter with the members of a Chinese gang in Shanghai. The first guy through the front door coming after Shioda sensei got a broken bottle in his face. One suspects that no where in the Daito Ryu or Aiki Budo repertoire is a form in which one takes a bottle and shoves it into someones face. Obviously Shioda Sensei was generalizing from specific principles of openings, lines of attack, and atemi waza to spontaneously deal with a life and death martial encounter. Clearly though he had the intention necessary to do what was needed. That came from training.
I think that training in the dojo is and should be largely about training in principles. To do this properly and safely the principles should be made as clear as possible. They should be isolated by various attacks / techniques so that they can be understood and internalized by the practitioner.
If you want to go beyond that and do scenario training, which is the state of the art in training technology these days, then feel free. One can get an armored assailant as in model mugging and pound on him, although joint techniques are a bit dangereous since the pads won't protect against that.
But then the armored assailant is so armored that he can't actually fight realistically. So this type of scenbario training isn't "real" either.
In fact the only way I can see to really work on your street fighting skills is to street fight. It's the only thing that has all of the reality and none of the limitations of other ways of practicing. So you do the dojo thing to imprint skills and develop your strength and intention in a controlled environment and then you go out to bars and get in fights and see if your stuff works. A number of the uchi deshi did just that.
But then street fights are with street people. These are possibly dangerous but largely untrained folks. As Ellis Amdur pointed out "martial arts are about training to fight another professional." So to be realy sure that your training is addressing the issue of non-traditional attacks etc. one should go to the local boxing gym and challenge an experienced fighter. One should go dojo busting, visiting every style of art and challenging their seniors to fight for the honor of the school. That's the only way I can see to test what you are doing against every possible attack and response.
Larry Bieri Sensei said that Budo isn't about dying, we all die sooner or later no matter what we do. It is really about what you do with the time you are alotted when you are alive. Training should be about developing those characteristics which will contribute to having a great life in which you basically "serve and protect". To do this one needs to train hard and with realism but it doesn't mean that we have to make the training in to some kind of urban survival scenario based comabt course. That may make you better able to survive on the street if that is your requirement but it probably won't serve to improve your life much.