I personally don't believe in competition. If I did, I wouldn't have considered training in Aikido in the first place. However, my "parent" dojo,--
http://ctr.usf.edu/aikido/dojo/ --has recently had their first "friendship" seminar with other dojos in the area. This is so that other "styles" of Aikido can all train together, which I think is a good idea. However, I don't think you'll see a "karate" student "sparring" with an Aikido student in these seminars, probably in order to avoid injury to both practioners of each of their respective arts.
Competition should NOT be used in order to "show the Aikido student" the ineptitude of the art(which it isn't), or even that the "attacks" are "unrealistic". Any Aikido student can train in any other martial art that one so chooses in order to find the weaknesses and/or strengths in any chosen art as compared to aikido, so competition is just plain unnecessary. Keep Aikido competition free, and leave that to "sport" arts like Karate and Judo.
Personally, I don't see a shodan karate or TKD student being very effective when attacking a shodan Aikido student. Many of the Aikido defense techniques look like defenses against the "unrealistic" karate and tae kwon doe attacks that so many sceptics love to bring up. (Many, many more are defenses against samurai sword, spear, and tanto attacks.) That's just my opinion, I could be wrong.