As far as competition being detrimental to Aikido on the fundamental level as Kami has pointed out- is anyone going to say that they've never felt a small amount of competitiveness in the dojo? Did you start aikido with someone and realize later that you were competing, perhaps uncounciously? And even in testing, when perhaps you fail a test and one of your peers passes (or vice versa)? Do you not feel the same thrill of victory or the same defeat of loss? While Kami may be correct in his assement of competition I think that this is something that is not just on the physical level of formal competition, but on the individual's mental state while doing Aikido. Maybe as you improve these feelings of competitiveness fade.
Or maybe I'm just a competitive person. Who knows?