To me black belt means that you have mastered the basics and are now able to begin to understand the principles of an art and the more advanced techniques and theories.
God knows how many first and second dan instructors there are around with virtually no knowledge. I partially blame the obsession with rank for the degeneration of the quality in the martial arts. Some people get a 3rd dan and think they are masters, they think they have the ability to change and modify the art, to create what they think is better etc etc. clearly they do not have that ability - as many many of these 'home made' schools churn out rubbish.
I also think that the black belt system is over relied on. Of the systems i practice only Daito ryu has a Belt system, but also retains traditional certification.
Ba gua, Tai Chi and hsing I rarely have a belt or sash system. they are not really relavant to learning.
Jigaro Kano created the Belt system when he created Judo. The main purpose was to establish a recognition of skill for training/sparring purposes etc, then everyone adopted it becasue the system made sense.
Before the belt system, licences and certificates were given. not quite such a visible system of reconition.
Now i think it is too visible. with people relying on what is around their waist rather than whats in their mind.
A belt only covers two inches of your ass, the rest is down to you! (cant remember who said that - one of the gracies i think
)
cheers
Chris