At some point, promotion is more about recognizing someones dedication to and promotion of the art, maintaining a clear hierarchy within an organization, and the ability to promote others. Where this occurs is blurry, and in many cases it's more a gradual thing than a "X is earned but Y is granted" sort of thing.
In our system, there is new material (in so far as you have to learn a new form) through 9th Dan. But these forms are not really teaching any new techniques, concepts, or principles. I would say that somewhere around 3rd or 4th Dan, our rank becomes more about hierarchy and ability to promote, and by 6th or 7th Dan it's primarily about dedication and promotion of the art.
As someone mentioned, pretty much all arts have some tradition about promotion, usually to one or two ranks below your own. Our tradition in the Moo Duk Kwan is one rank below your own, which I believe is the most common. Obviously, there must be some process in place to promote to the highest ranks, or the hierarchy would collapse. This generally amounts to a board, composed of the highest ranked members of the organization, or (mostly in smaller orgs) a decision made by the head of the system.