As long as Brazilian Jiu-Jitsu's focus will remain on submissions and live sparring, there is no way the art will water down. Yes, I need both criteria to be true for my argument. Live submission sparring simply means that both people will use their entire strength and knowledge to choke unconscious or bring enough pain to coerce the other person to 'tap'. There are no short-cuts to becoming better, and there are no fancy doors for people to hide behind. If so and so holds a high rank and gets ass-whooped by a much lower belt, it either means the person never obtained that rank, or that she stopped sparring a long time ago.
I guess that if the individual schools were kept in isolation, and stopped competing with one another, it would be easy for an instructor to dish out belts to their students, much faster than other schools, and people would still validate their rank through sparring inside the school. But it's much harder for the whole discipline to water down when schools are in constant competition with one another in a system based on points.
Of course, it means that the rules themselves promote an openness and a focus on submissions, and not prohibit technique after technique until the art is no more, but luckily the people in charge of the International Brazilian Jiu-Jitsu Federation are not idiots : the last thing they would want is their life work to be discredited by the watering down of the ranks.
I sincerely hope that schools will continue to compete one against the other, under a system of rules which promotes growth and openness, instead of increasingly focusing on safety based on anecdotal evidence of perceived increase of safety by the prohibition of such and such technique which twenty years ago caused someone to break their arm.