Excellent points from everyone, all true.
It is true that balancing "basics without boredom" (my next book…just kidding) is a difficult task. We do need a huge amount of basics to get anywhere in Aikido. That's why I suggested (on the drop-rate thread) mixing basics in with other fun stuff. Instead of just going through a routine of every month starting off with ikkyo and working your way up, try having some days where you only practice one technique all class -- no variations at all, just get it right. Then other days offer more variation to expand on the technique, other days do randori, other days do nothing but buki-waza (weapon take always). I am not saying that teachers never do these things -- I'm sure they all do, but I have seen the frequency very low: high volume kata, very little bukiwaza, very very little randori, etc. etc.
Interesting that Mr.Smith identifies 2 main causes of "teachers that stop learning": not confident enough in their ability to experiment, and I've made it syndrome. Look at how teacher's issues become the student's issues:
If sensei fears change, or lacks confidence in his/her ability students will sense it -- and then they will naturally question their own confidence since they are learning from you.
It seems to me that a common reason for 2nd and 1st kyu dropouts is that they come to a place in their training of "good enough", "I have enough now, so I'll move on". I wonder if that attitude comes from their teachers who seem to have stopped at "good-enough"?
So it seems that students are the Budo teacher's mirror, reflecting the good and the bad character so that sensei can grow and learn. I personally think it is wonderful to have such a rapid feedback system readily available.