Aikido works, it can work in any situation according to the person's skills...
Since the days of the Samurai the practice of martial arts was done in a controlled environment for obvious reasons... Imagine two people "sparring" with katana swords... There would have been more dead bodies at the dojos than the battlefield.
In my opinion Aikido doesn't look like Judo or anything else in a real fight. Aikido is Aikido it has its principles. In a real fight it could be anything from a single devastating atemi to one of the most complicated techniques...
I agree that it's not a good idea to try to grab on one's wrist while he is punching you, that's why Aikido has hand deflections but as I said, anything is within the person's skills and ability. Of course, when you don't know the attack it's more difficult to defend against it, that's why in Aikido we are forging certain combat skills rather than training different scenarios that may never happen... Kata is not a scenario, anyone who is practicing seriously Aikido knows what I mean..
So, yes, it's more difficult when you don't know what's coming but remember that in a real self defense situation, your attacker doesn't know of your Aikido skills either...