Hey, be nice.
I want to point out that the kyuu system is prevalent in Japan, not just in the Butokukai, but in almost everything. You can become a 2kyuu in Aikido, flower arrangement, flute playing and even English speaking (I'm a "ranked" Japanese speaker). Therefore I think that the kyuu system may have been more natural to the Japanese founders of the art than it is to many of us, and that it may be more indicative of an overall Japanese tendency to "rank" peoples' ability in things than a political move.
Also, some people have mentioned or at least implied that the kyuu system is not necessarily wrong, but is "not enough," or that it needs to be supplemented by a letter to transfer to other dojos. Do you have any ideas about what be a more satisfactory system?