This is a very good issue. Personally, I can see both sides of the coin here. While there are very vaid reasons for rank, such as allowing visiting senseis to quickly spot uke's with more training time! oh boy...... I think people sometimes place way too much emphasis on rank and situations like the one giriasis described can then develop and really interfer with a persons training.
I didn't get involved in Aikido or Iaijutsu with the goal of attaining rank. I don't track my hours of practice and I could really care less if I ever test again. In fact, I made the mistake of telling a senior student I wasn't going to test at all anymore because I didn't think testing and rank was that necessary or important. Well, this person felt obligated to pass this info along to my sensei. That Monday night, for some strange reason, sensei felt it necessary to open class by having me test. Big fun.... After this, it was explained to me that the test and promotion (rank) was not just for my benefit, but it helped everyone else in the dojo as well.
How can this be? Well, newer students SEE what techniques you should be capable of doing at that particular level (rank). Sensei and the senior students that help teach see their reflection in your movements which help them adjust their teaching methods (as in: who the %$&* taught you that crap?) HA! just kidding! . You also receive excellent feedback on your techniques, which hopefully you implement on your way to the next rank.
With all that in mind, I changed my view on rank and testing. I didn't really care for it before, at least now I can tolerate it......