Re: Is aikido a budo?
I think once you've learned to "fight," which someone at Yamada's level almost certainly has, you realize that it's just not that interesting or valuable a skill. Opportunities for cracking skulls are pretty limited, especially if you'd prefer to stay out of jail. Opportunities for connecting with one's fellow humans are nearly infinite.
I don't have any personal experience with Yamada Sensei, but from what I've seen of other senior teachers this change in focus tends to happen long before anyone (except maybe themselves) would notice any decline in physical skills.