What we do is aikido training, a bit like you'd do circuit training to improve your fitness for a marathon. There is no doubt that being fit would help you complete the run, but it would be better to practise by doing a mixture of running and circuit training.
I presume when you talk about Aikido standard Jim, you are referring to the ability for use in a real fight. Therefore I would say that there is a problem in that very few of us get to use it extensively in real situations. This includes most of the people who actually instruct it. Therefore I would say Aikido could easily be becoming worse in standard because of the lack of opportunity to apply it.
However, the techniques and the principles are still there, and there are also people who have to use it practically every week(e.g. police). I would be interested to learn if what they think they have learnt in the transmission from dojo to street. (From my experience most people in the police have their favourite techniques which they use regularly, and there are not any universally accepted 'best' technqiues).
Also, for some aspects of aikido e.g. jo and bokken work, we do not have a culture where these are used regularly, and therefore know very little about how these combat situations look when people are fighting for their life.
In cntrast to the above comments. Aikido was new to the first uchideschi and others practising with Ueshiba. There is nothing to say that they really understood aikido completely then, and they have possibly developed more understanding over their years of training. Therefore I don't think Aikido is necessarily getting worse as we may be getting better at crystalising out the real principles behind it.
Therefore, in general I would say that Aikido 'teaching' is getting better, but people will only ever know how effective THEIR aikido is by using it in real situations (and this isn't a recommendation), and the opportunities for this may be getting less, and therefore we cannot learn fom these experiences. (In the middle ages in England 1 in 20 people died during street violence - which probably adds up to just less than 1 in 10 men)