The catalyst for the enormous wall of text that is going to follow this was this thread on JJ Forums and the conversation about women and BJJ standards that came out of it. This is a long post and contains largely my own personal philosophy created out of my experience with Taekwondo, BJJ, and Judo.
How SHOULD promotions be handled?
Black Belt: My personal view is that not everyone necessarily needs to achieve a blackbelt. Solely putting time in grade should not be enough to eventually land you a blackbelt. If you are getting tooled by blue belts that outweigh you by 50 lbs just because they are super athletic then you aren't black belt material no matter how good you are at teaching or how many years of experience you have. Black Belt is a signal of both ability AND knowledge. For the same reason I don't believe that solely winning the mundials 5 times at brown belt is enough to warrant promotion to black belt. If you can't teach worth crap, then you also aren't black belt material.
Brown Belt: This is where most people belong in my mind. If you are excellent at competition, or excellent at instruction, but aren't at least good at both then you should get stuck on brown belt and stay there. That doesn't mean I expect every black belt to be a world champion, but if you aren't getting on the mats to compete and beating other brown belts then you don't need to make the step up to black. However, if you hate to compete but are a great teacher then there is no reason why you shouldn't be a brown belt. At that point there's not the same expectation of ability to handle blue-purple belts that outweigh you massively, or to have all of the answers. So you can be a competition only brown, or a knowledge only brown and get by.
Purple Belt: This is the belt where the distinction will end up getting made for you. Are you going to be a competitor or a teacher or both? To reach purple belt I think you should be competent at both already. You need to be able to teach a beginner class and you need to have competed. This doesn't mean you should be able to school a whitebelt that is 100lbs bigger than you are, but you SHOULD be schooling white belts who are your size and you should have a technique library to draw from that is much larger than white belts or new blue belts. You should definitely be able to run roughshod over anyone with no experience pretty much regardless of size difference.
Blue Belt: This is the commitment belt. You've shown some dedication to training and grasp the basic concepts and techniques. The only requirement for blue belt is that you be able to perform the basics and roll competitively against other white belts your size with similar training, and roll successfully against new people your size.
Women vs Men: This comes up a LOT. Should a woman be required to roll successfully against a man of equal size in order to progress in jiujitsu? For me I say no for blue belt. Getting your Blue belt isn't about rolling, it's about knowing the basics and being ready to learn how to use them. As a purple belt, it's a different story. You SHOULD be able to splatter a 150lb untrained male. If you can't do that then stay at blue belt until you can. If that means you have to hit the gym to develop the physical attributes necessary, then so be it. My reasoning behind this is that a Purple belt is a sign of competence at self defense as well as everything else. If you have one then you should be able to defend yourself if attacked. I wouldn't want a woman that I promoted to purple belt to be unable to defend herself from at least a moderately sized male attacker. At Brown belt I would expect women to be able to handle 200lb untrained men with assurance, if not with ease.
However, I hold men to the SAME standards. If you are a 135lb male and you want your brown belt you better be able to breakdance all over a 220lb noobs face all day long.
Batsugan Promotions: This is something from Judo that you rarely see in BJJ, but is becoming more popular. It shows up in MMA occasionally when a fighter gets promoted after winning an MMA fight, and it happens sometimes when a blue or purple belt wins the Mundials. It's promotion based specifically on competition victories. Alliance took it one step further this year and held a "fight for your belt" event for white belts trying to make blue and blue belts trying to make purple. The competition was no weight class, no time limit, and as soon as you and your next opponent in the bracket finished you started your next match. Minimal breaks. One of our guys won 5 or 6 matches in a row to go from white belt to blue. This guy is a GREAT competitor. Extremely athletic, really good at the things he does, but his technique library is very small and his technical understanding is limited. His technical execution of the things he does is great, but he would he can't explain past the basic details. Does he deserve his blue belt? Absolutely. But he will require a lot of development on the his understanding of the technical side before I think he is ready for his purple belt.
I'm interested to see if more of this catches on and what it does to the sport overall. I think Batsugan up to Brown belt would be fine for me, but from brown to black as I mentioned above I believe you have to be more well rounded than can be determined by solely competition prowess.
All of this being said, I really liked the exercise that Julia mentions here about determining how to promote people. Black Belts want the people they promote to represent their lineage, their school, and their instructor well. Not just be able to do the techniques, so every Black Belt is going to have different and equally valid promotion methods. I fully expect to be a black belt four years from now and will be working super hard to make that happen, and if I do then I expect I'll be no different.