In our Federation we first come across a live tanto as part of the sandan grading. I had only used wooden weapons up until that point. It was stressed to me as I trained with those wooden weapons, that they are at all times to be treated and handled as if they were live. So after about 5/6 years of wooden tanto, when facing the live version in the test, I can honestly say it did not move my mind. And I really enjoyed the experience.
I look forward to the live sword a few years on in my practice. I am of the opinion that live blades should be reserved for very high level training as sharp weapons have a nasty habit of fulfilling their function, blood can be spilled even in skilled hands.
I'm not sure that aikido knife defenses can be written off as of no real use in a 'real' situation. As the conflict is between humans and the knife an extension of 1 or more of them. I fully understand that at close range if someone intends you harm with a sharp object, there's a good chance that you could get caught out, and contact will be made. But there may be infinite possibilities in the run up to that point. This surely is where Aikido has the advantage, mental state, position, the intent to not stop the attack but to allow or even encourage it to happen then to lead it to resolution? Maybe someone with 'some' effective weapons training ( in any art ) is faced with a 'real' threat from a knife wielding attacker, and maybe that person, engages in the fight and maybe they disarm the attacker, and maybe they come off badly. Maybe the person with a lot of effective weapons training takes note of the threat, and then deals with the person who ultimately is the real problem. I've seen someone talk their way out of a tight spot that involved weapons and they had no weapons training. So is a bit of knowledge a bad thing?
I think that wooden weapons used properly are completely adequate for most training, but there's definitely a place for live blades, as they certainly focus the mind ( especially when the sunlight enters the dojo window and glints on the polished steel edge ).
Just my two cents worth,