Atemi is a strike meant to compromise an attacker's balance. Many aikidodoka (aikido practitioners) are uncomfortable with striking, some remarkably so.

There seem to be two primary sources for hesitance to use atemi, at least that I have noticed first hand:
1) They believe strikes are meant to cause pain and injury, which is contrary to the principles of aikido as laid down by the founder of aikido.
2) Mature and civilized people have respect for others and are not violent people. They equate striking with savagery and are actively resistant to indulge in it.

Let's look in more depth at each of these.

First, in Morihei Ueshiba's own words: “Atemi accounts for 99% of Aikido.” Note he doesn't say 10%, 40%, 60% or even 80%. He obviously felt that atemi was integral to aikido techniques, so much so that only 1% of the time it would not be necessary. Sure, there are other ways to take balance or posture, but to dismiss atemi as a means of doing so seems to be missing a major point the founder felt was important. We can conclude that atemi is not contrary to the philosophical principles of aikido. Also note that Ueshiba was a deeply religious man who embraced a profound belief in peace and harmony. He was also a military veteran and warrior who understood the nature of violence. Most people today look only at the peace embracing side of Ueshiba and overlook his real experience with violence.

The idea that strikes cause pain and injury is mostly learned and reinforced in movies and TV, where almost every punch causes a bone break, knockout, or dramatic spray of blood. This is nothing more than Hollywood sensationalism and drama, and has little or nothing to do with reality. The truth is that striking rarely causes injury, and when it does it is because of a remarkably hard strike and well placed strike. Without going in deep to different types of strikes, suffice to say that atemi are not the heavy duty knockout strikes you might see in a boxing match. They are more akin to lighter strikes such as a boxing jab. A boxing jab is a short, fast punch meant to make the opponent move. Sound familiar? Atemi is meant to move uke. Boxing trainers and coaches will tell you that the jab is the essential punch for a boxer to use because it sets up all the other punches. In aikido, we are merely setting up for a throw or lock instead of a knockout punch.

The principle of the boxer and the aikidoist is the same: get your attacker/opponent out of position by using low risk maneuvers while protecting yourself, then when he is out of position execute waza (technique) to finish the exchange.

Second, mature and civilized people tend to avoid violence, which leaves them ill prepared for it. The very nature of martial arts training is to adequately prepare for dealing with a violent situation, is it not? We do not want to give up our civility, but an attacker can make the decision to be violent and we must respond appropriately. This means we must protect ourselves first, and hopefully not harm them. This can be difficult in extreme circumstances.

Atemi can deliver a slight or momentary pain or sting, and this may be necessary to alter the intent of a determined attacker. This is very hard to emulate in a dojo environment where there is no real intent behind an attack. When there is real intent by a committed attacker, atemi becomes not only very useful but necessary.

I believe this is worth considering when we look at what O'sensei said about atemi being 99% of aikido.