Its been interesting to read the various comments about rank and the visible symbols of rank and achievement (eg coloured belts). I would agree that recognition of achievement is also important as a motivator for some people. Others find other motivators for their continued training.
The dojo I train at uses a colour belt system to recognise acheivement of grading requirements and I have been involved in grading people. I can see their sense of achievement (and pride too) when they are recognised for achieving something that they weren't able to do before.
From this perspective I agree with Mr David Organ, its an achievement for them that they can celebrate. Its wonderful to watch someone take ukemi when 6 months ago, they had the aikidoka flight characteristics of a sack of potatoes. Its a good motivator for some to be recognised for that and other improvements. Yes, Shodan is an achievement, but it is a beginning.
I agree that rank can be used as a guage of progress but, as been highlighted by Mr Paul Watt, there isn't a consistent standard. Regardless, for some, its a way for goal setting within the dojo that they train at.
IMHO, if rank and the use of coloured belts is seen by those who use it as a means to an end and not an end it itself, then it may be beneficial.
Happy training all