It is a great method to use. Poor little yellow and green belts wearing a black belt. They always eagerly took it... then were forced to keep it when they wanted to give it back.
They soon found out they didn't know so much, couldn't teach, couldn't do higher level katas, couldn't take throws, etc.
One poor kid went out in the middle of the room all proud wearing one of my instructors black belts. She told him to get a bokken and do sword kata #1. The poor kid stood out there for a good 10 minutes while we all stood in the back of the room and stared at him. Finally he said "I don't know the kata... I'm just a yellow belt." My sensei said "Are you sure? You were just offering purple and brown belts advice. Only a black belt would do something like that." Never did have much of a problem with that kid after that.