My understanding is that the main difference is that in Kyokushin Karate, kumite tournaments are full-contact. In Wado Ryu, as well as in other major schools of Karate such as Goju Ryu, Shito Ryu and Shotokan, points are taken in kumite tournaments when a player demonstrates that he/she could have hit the other person, e.g. by tapping them on the chin with the arm not fully extended. Of course there are other differences in the kata and practice methods, but those differences also apply to the other schools of karate.
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I have been practicing Wado Ryu for several years, and although I have not practiced Kyokushin kai, I have friends who do (and I try not to make them angry!).

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