A question for you: what rank teaches beginners in your style? Are people who come in off the street aware of the differences in rank? If not, how do you inform them?
All good points, Kacey. Since you ask, I'll try to explain as best I can how it works in my style. In BJJ, under very rare circumstances, a blue belt will run classes. This is usually when there are no alternatives in the area. Uncommon, but not unheard of, are schools where a purple belt will teach classes. Brown belts run schools fairly often, and of course, most schools are run/owned by black belts.
The belt system very roughly equates to most arts like this: Blue=high Brown, Purple= 1st to 2nd Dan BB, Brown/Black = 3rd to 5th Dan. This is definitely not intended to be precise (how could it be?), but I'm basing it on explanations of how each rank is described in many arts. Where a purple belt is expected to be proficient and competent at all stages of the style, etc.
A key distinction, in my opinion, is that the black belt in BJJ is, without exception,
expected to be an expert. It wouldn't be stretching things too far to say the same about most of the Brown Belts, as well. So, when a student, even someone with no prior knowledge of BJJ, comes into a school, they may not know where the purple belt is in the heirarchy, but they will know he's not a black belt. This obvious visual cue would lead to a discussion about rank, the purple belt's instructor, and how things work. From the outset, there would be no misunderstanding.
So, once again, given that most styles are different from this, has it always been so in the style? If not, when and why do you think things changed and do you believe that your style appropriately represents the changing significance of each rank?