It has been said before, and I think it bears repeating, "Rank is relative". Often times, I'm asked by people stopping by the dojo, inquiring about Aikido, how long I've been practicing and what rank or level have I attained. In this type of scenario, the rank and officious sounding Japanese terminology, lend credence to whatever I'm telling that person. The higher the rank and number of years of practice the more credible one sounds to the uninitiated. When visiting a dojo in another area, sometimes the same questions are asked by the dojo personnel. In this scenario, the rank gives them a ballpark idea of ability. Most Aikido people have reasonable expectations of Yudansha in terms of Ukemi and Waza skill. You may surprise them by displaying greater skill then they expected for your rank or you may disappoint them by displaying less ability. Nevertheless, the rank allows them to fit you into their preconceived notions.
In these two scenarios, rank performs a function, external to us. Rank can also serve to influence dojo members to take a more active role inside the dojo. The higher the rank the more responsibility the individual member assumes (within certain dojo atmospheres). It can be used as incentive to get dojo members to commit more of themselves into the activities of the dojo. And, it also serves to stroke a few egos. Within the construct of the organization to which you belong, rank serves many purposes, and while your own ambitions and intentions within that organization may determine the rank that you wish to attain, far beyond that construct it means very little.
There may come a time, though, where external validation of ones own innate capabilities is no longer needed. No more need of tests or rank. Then, you can start your own martial art and have yourself declared SOKE GRANDMASTER POOBA!