The question may be, then, should there be ranks for anybody, let alone children?
To most people, rank means everything. Such is life, eventhough rank means absolutely NOTHING except for one's ego. Dan Harden is not even a black belt in Aikido but I doubt any Aikidoka who met him in person would question his skill and abilty in Aikido. I have seen black belts being awarded to people that hardly know how to fall correctly. So what is rank. It is NOTHING. I personally respect abiltiy not RANK. Just like in the movie "Karate Kid"...... you want a black belt, buy one at J.C. Penny for $3.50.How many do you want? I can form my own dojo and promote myself to 11th Dan and call my art "Henry's Odikia Style Aikido". I might only have one Sensei and two students.......Me, myself and I. Who is going to stop me. So, what is rank? Answer......No rank, no money for many martial art dojos including Hombu. In martial arts there APPEARS to be a general correlation between how much you pay and how much you think you learn, meaning the more you pay, the less you really learn a "REAL" martial art and not just a martial exercises which is the same as any physical exercise except with a twist, no more than that.
When I was young in Hong Kong, most martial arts teachers could hardly make a living because they believe in the old ways and that is accepting a student is equivalent to accepting someone as a family member. Teaching and learning is primary. Money is secondary. Skill is not measured by rank. There were no rank. It is measured by one's ability judged by the teacher and the student himself. Respect is earned by skill and not by rank. Unfortunately, in this day and age, everything is commercialized and rank will stay regardless of its worth. Therefore, one has to carefully choose his sensei and evaluate what is being taught. In my OPINION, one good guideline is to judge the amount of muscle power required in the art that is being taught. The more muscle power required, the less it is worth. I saw a Kung Fu demonstration in China Town recently and the first thing the teacher said to the audience was that "No KI (Chi), no martial art". Please take it for whatever it is worth.
As for kids, consider it as martial exercise. It keeps them occupied and dissipate their over abundant energy. Rank is an incentive for them to keep going. Martial exercise prepares them for martial art later on. Having said that, I remembered that some of the kids in my own daughter's kids class were actually better than many adults. So, there are exceptions.
Bottom line, rank as we know it today, whether for good or for bad is never going to go away because of dojo survival (money) and people's ego. In my experience, I learned a lot more by wearing a white belt instead of my black belt. If nothing else, I learned humility. However, that is just me and only my opinion. Not intended to offen anyone or any dojo or any style of martial arts or the martial arts world in general.