not absolutly true. there are many instructors who almost give out to promote themsleves and their systems.A rank in a system deminstrates determination and instruction from a qualified instructor.
I have seen a couple of 7th degree shotokan people (at 35 years of age) whom I can't belive would have had that rank 20 years ago at that age. Also I have seen 10 year old 2nd degree black belts, Personaly I don't belive in that ) so these kids may make 5th degree befor they are 20. Bothof these examples in no way says the instructor is qualified or that the student is determined it only means that rank has been given.
Aside from that I know of a few people localy whom promote each other in their given organisations if the same rank is given to them in the other guys organisation. This is the "old boys club" doing it's McDojo ranking at it's upmost level of impress with rank theroy.