I think a large part of the passing of atemi is the reputation (and misunderstanding) that aikido is a "soft" art. Too many folks get tangled up in the late '60s hippie version of aikido as "peace and love and pixie dust" and forget that it can be a very lethal art. They'll watch nothing but youtube videos of guys flying through the air without ever being touched and read literature that talks about nage's responsibility to never hurt an attacker and think "Wow, that's an art I could do and not feel bad about myself 'cause I just couldn't bring myself to hit someone." They go to a dojo and over time instructors begin to realize that keeping students means teaching what they want to learn. The art devolves from an effective defense to really nothing more than a dance. Aikido is not some new age, sit around singing kuumbaya and feel good about the world thing. It's a martial art with very serious potential for permanent damage or even death to an attacker.
We've had students that simply would not bring themselves to strike or would slop something out and expect uke to react as if he'd been hit by Hollyfield. It is our responsibility as aikido-ka to correct this. Even if you aren't an instructor you should throw your atemi in a dynamicaly correct fashion to get uke to react. Don't give your nage a pass when they slop a strike out there...you're not doing them any favors. Talk to your instructors if you see this as a problem in your dojo. My style traces itself back to one generation away from DRAJJ and striking is always welcome. Kicks, punches, gouges and all sorts of other nasty little tricks will come in handy in a self defense situation. If you're teaching a style of aikido that bills itself as a means of self defense then you owe it to yourself and anyone you may be called upon to protect to become proficient enough to strike while flowing through an aikido technique.
Sorry for the rant, guys and gals. This is a topic that puts me over the edge...especially when I'm just on my first cup of coffee for the morning.