The color of the belts is open to instructor preference. However, anything more than 7-8 color belt levels is a warning sign that the instructor is milking the students for money. More belt ranks equals more testing fees.
We have 9 color belt levels at my school but the only "fee" we pay is $10 for the actual belt -- we don't pay to test. I guess if you want to call an extra 10-20 bucks milking the students go ahead..
Likewise - we have 10 color belt ranks, but you start as a white belt, so you test for 9. The fee for testing is $25 - but the money goes to the class, not to me, and is used to buy equipment and supplies (rebreakable boards, wood for breaking, focus pads, a couple of wavemasters, being able to keep uniforms and sparring gear for students to buy in stock instead of ordering it when needed). If you think that fundraising for the class is "milking students for money", then I don't know what to tell you. I teach at a Y - what the Y pays me barely covers my expenses in getting there and maintaining my own training so I can become a better instructor; I have to raise money for class supplies somehow, and this is the best way I've found.