I think testing is good for one basic reason: it's good to be put on the spot every now and then. For many people, there is great pressure that comes with testing, and this is a good exercise for them. It's just like any other day of training except, just like every other day of training, it's a bit different too.
In response to the fellow who said he wants to wear hakama, in part, to remove the pressure of someone knowing what his rank is, remember, not all schools wear hakama as a sign of black-belt...AND one school's black-belt is another school's brown\1st kyu\etc. So it's all relative.
Rank is only important to me in that it provides a chance to test myself on a relative scale. My ability has little to do with my rank, and my rank has little to do with my ability, but the two are related to some degree and the small degree to which they are related is useful. Can I be more redundant?
Oh yeah! and non-martial artists are always impressed when you say "I have a black-belt."