Wait, is Tsumuji just like his son? Can't do anything in practice, but once on the field, it somehow works?

No. Takaharu sucks at technique and is most effective when he fights.
Tsumuji does know the technique, but has little to no powers to use. So far, when he saved his children in this episode, it was the only time where he could actually properly perform a ninja skill.

I think they could bring him back.
maybe in later episodes we'll have some cool gramps and father teamup fights, who knows?
but for now I'm happy everyone's favorite awkward ninja dad got to have a turn in the spotlight.

Loved this ep - was very touching and heart-warming. We need more episodes like this.

Crazy theory : gramps sealed the Shuriken of the End into dad, and that's what is blocking his nintality.