Testing as a step along the way
I agree strongly with AikiAlf who said that testing is a step along our personal way.
I used to train in Seidokan aikido, and there I was told (we talked a lot in Seidokan) that 'test' is actually a poor name for what a test is since the teacher should know from a student's performance day to day whether or not they are ready, and so the test is more of a ceremony than a test. We were also told that our aikido was judged much more on our ability to demonstrate aiki than on our ability to throw people. We were given rank certificates that said that through diligent practice we had reached a level where we were deemed 'ready to assume the obligations and responsiblities associated with the rank' of whatever kyu.
Ultimately, what I internalized is that (1) the test is an opportunity for me to reflect and consolidate what I have been learning, and to share that with my aikido community, (2) technique in aikido is ultimately a kind of packaging or maybe a vehicle through which I express myself, and that it is my responsibility to have my aikido reflect my self, and (giving my answer to paw's rhetorical question) (3) rank is mostly about one's role and responsibilities within our aikido community and because of this rank should reflect to a large extent one's ability to honor the role and discharge the responsibilities appropriately.
Yours in Aiki