To step mindlessly into the fray:
Nikkyo is a perfectly good self defense technique (if it happens to come up, I wouldn't go looking for it or any other specific technique). It just is a lousy "wrist twist" technique. If someone is not interested in preserving the joint, and/or is simply too blitzed to feel it, the pain aspect simply will not work.
At a deeper level, Nikkyo is a wonderful technique to off balance and control. Any twisting of the wrist is only to make a connection with a partner or opponents' center.
I've used this technique in a real situation, and it failed miserably.
I tried to apply pain/submission to someone who didn't understand the rules, and was in an altered state. He looked at me and asked what the **** I was doing to his hand? Then I heard/felt the pop. I'm reasonably certain I'd dislocated or twisted a connecting tissue in the joint and he stared at me. I switched to sankyo and off balanced him by linking his skeleton properly, and he came along like a little kid- no pain, all center and structure. That experience has changed my Aikido for the better, I no longer am interested in seeing how much pain I can inflict, I am way more interested in seeing the most efficient way of affecting a partners balance.
As to the whole "Aikido as self defence" question, well it is a complex thing. If you are afraid of getting hit, and you react to it, you are in for a rough time. If you want to inflict maximum damage, Aikido won't do you any good, cause you'll have missed the principles which are being taught.
In any real fight, both usually get hurt. It is just a question of how badly.