The dojo I train at trains with live (eg sharp) blades every now and then. There is certainly an impact on the mindset when sharp blades are used.
IMHO, the use of live blades needs to be carefully considered, from a safety and legal liability perspective. It also depends on what you would want to achieve from the use of a live blade.
From a self defence perspective, there are many commentators (Marc Mac Young et al) who note the dangers with people with knives and the effectveness of dojo martial arts. I certainly agree with the comments of Mr Van Dyk when training with a live blade.
In addition, the use of weapons in aikido, certainly in my training, is as tool for teaching body movements, positioning and distance and not about self defence per se. From this perspective, live blades are definitely not necessary.
From a self defence perspective, I think that it is a very ill advised decision to use your bare hands to take a knife from someone who is looking to fillet you from neck to crotch.
If there is anyone who beleives that are are real benefits to training with live blades, I would be most interested in hearing them.
Happy training all