343rds ranking system is purely based on Roleplay. Active members in the faction that both provide forum and ingame Roleplay will necessarily rank up quite fast, while people that don't invest that much will stick to the lower ranks.
This provides multiple benefits.
First, it's providing immersion to a degree. Commanding structures help if you're roleplaying a military faction.
Furthermore, the restriction of caps to the higher ranks provides a degree of control over the overall quality of the RPed caps. While a fighter pilot that's having a bad day can be problematic, RP-wise, Caps are always watched more closely, out of logical reasons, and that way you can control what caps are doing out there by restricting people that haven't proven themselves to be capable (even if that sounds strange)
The restriction of Kusari ships and stuff to higher, non-commissioned ranks makes for a degree of immersion, the prestigeous and harder to maintain ships being restricted to the officers that have proven that such ships are logical to be placed in their hands.
All in all, ranking systems fulfill various roles - mostly they ease the way factions coordinate.