I said, "yes" because I really find that testing is there to encourage people to aspire to something and to work to improve their skill. We are given a certain level of expectations and certain set of skills that need to acheived.
As far as time requirements, to me they are just a guide as to how quickly a student should be progressing. But they should not be given that once you get "x" hours you should pass. In my school after we have the "time-in" whether we test is still up to our sensei. If he doesn't feel that your skill meets the level, you won't test. However if you appear to progress more quickly you will test sooner. (the later is not done a lot though).
However to de-emphasize rank, we use the white belt/black belt system and we don't line up according to rank. The more senior student is encouraged to go first because they are expected to understand the technique better than the less senior. But that isn't a sanction for people's ego getting out of control.
What I don't like in testing and ranking is not knowing what is expected of me. In my old school, people would be tested and get promoted, and some would not be tested and get promoted. Some promotions were based on skill and some promotions were based on sympathy (i.e. "you've be around long enough so we'll promote you although you still stink"). This obviously created a lot of resentment on my part and other students. The promotions seemed up to the sole discretion of the instructor and no one knew what their strengths and weaknesses were. The worse thing was, if you asked, it was seen as "begging" for rank and frowned upon, and you tended then not get promoted. Additionally, there was not regular testing time where people were promoted at the same time. Someone could be upped in rank one day ahead of you and they were instantly your sempai and there is no real difference in your skill.
I guess the answer to this question really depends on how ranking is dealt with in the school. I feel that on the most part it is a good thing, but if you have it, one needs to take precautions to avoid the competition of egos among students.