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Additionally, there can be plenty of good people who end up getting stuck in lower ranks due to something fundamentally wrong with their gameplay (being bad at dealing with lows/throws, being unable to open the opponent up, dropping combos, etc), OR due to lacking knowledge of something. Some people can be very good fundamentally and still end up losing if they don't know how to deal with a particular character, situation, attack, etc.
It's really strange
1. To keep people playing via busywork incentivisation -- not to dissimilar to those insulting "Achievements", exploiting the same psychological foibles
2. To give casuals the sense of progression in a heady PvP environment that they would otherwise abandon, or ignore entirely.