I think it is a red herring to think of ranks as standardizing anything. Obviously they can't be completely arbitrary, but I don't think standardization is really the point. As Yamada Sensei says in the interview, "People know who is good and bad".
My teacher taught me that the purpose (in his mind) of having ranks was to give people a short-term goal to work towards. Additionally, the intensity of performing under pressure during a test is a useful change from the usual way we practice. It doesn't simulate a real-life encounter, but it might give you some feedback as to how well you've integrated the principles of aikido based on how well they come out when you are under pressure.
The process of testing and preparing for tests has helped me focus over the years, and I think there is a value in that. I can see the point about people getting hung up about judging and comparing based on rank (Yamada Sensei's comment in the article), but I honestly think that if you are not working on eliminating that mindset within yourself, you're not actually doing aikido anyway. If you find yourself in an environment where everybody is thinking that way, somebody is not setting the correct tone in the first place.
"If you compete with nobody, nobody can compete with you."
-- Can't remember who said it.