Many years ago I proposed a related question to members of an Aikido organisation I belonged to, 'who recognises our grades?', the reply I received contributed to my current view and response. Aikido is not in the belt or dependant on who awarded it, Aikido is on the tatami, is in our technique, however variable between the many styles and schools. A belt is a superficial representation of where we are, but as with many things, representation is open to interpretation - techniques may vary, but if they are strong, effective and appropriate what matter what we wear around our waist.
Ken, in saying the above ultimately your sensei is responsible for the safety of his class, the belt system can help us ensure that appropriate grades train together if needed, but it is not foolproof, as others have cited - the belt system is applied differently. Your sensei may make a choice based on safety or perhaps on technique, if Mr Orange wants to work within the teaching system used in your club, then he may have to fit into that system, that is up to him and your sensei - it's your job to learn Aikido and help everyone you train with to learn to the best of your ability. Don't stop thinking or questioning - it's what keeps us alive.