I don't know of any, but it wouldn't seem completely ridiculous to me, especially if it was a TKD or sport karate school that placed a great deal of emphasis on doing demonstrations (and there are several of those around). It may not be why you or I train, or what we want out of the art, but that's really another matter.
Ultimately though, there have to be SOME standards or requirements. I guess I look at it the same way I look at going to college -- if you can pass the coursework, you get a degree. If you can't, then you don't. Teachers will work with you if you're struggling with something, but at the end of the day, if you want the degree, you have to pass the required tests.
My main issue is with the notion that you deserve a black belt (or any other kind of belt) just for putting the time in. That belt should MEAN something, just like a college degree does. Or just like a Ranger patch does in the Army. Or just like the "Grandmaster" title does in chess.
I've always bounced around cities and schools and martial arts too much to ever attain the rank of black belt in any style. But one day I hope to. And when I do, I hope that I'll feel like it wasn't an easy journey. I hope that I will have had to demonstrate skills and abilities that I didn't previously have and that I achieved that rank because I was CAPABLE . . . not merely present when the roll was taken.