that's the trouble with the standard prisoner's-dilemma game: it's sequestered from the processes of everyday life.

It is, but it there is generally a bit of a disconnect (on both sides) between idealized mathematical models of useful things and the useful things themselves. These models are useful exercises and can teach us things but can't (or at least shouldn't) be mapped directly to practice.

the ideal strategy over the long term is Tit-For-Tat

It isn't quite that simple, there are other strategies that do better in different models such as forgiving tit-for-tat but again these are still models.