You're placing your own expectations upon others, here. Let me explain what I mean, because it's not as harsh as it might sound.
We all have our own thought of what a rank "should mean". Mine are likely different from yours in some substantive ways. That doesn't make one of those opinions better than the other - just different. Your instructor has set some standards for how they evaluate for each rank. Those standards are really the only fair way to evaluate whether someone in that school deserves their rank or not. Within my curriculum, nobody would ever make BB who forgets the basics - it just takes too much work to get to that rank for me. But that's in my curriculum. In some curricula, BB rank is more of a "serious student" rank, achievable in 2-3 years with reasonable effort. Students who have been studying 2-3 years will sometimes forget things you and I might consider "basics". I've had students in that range who routinely forgot the names of techniques they'd known for 2 years. It wasn't important that they remember those names for the rank they were at (they could put the technique to the name, but not the name to the technique).
As for the business side, as others have pointed out, a school - if it is generating the instructor's primary income and/or renting its own space - must have a certain level of income. How that income is achieved can vary. I personally prefer a steady monthly amount, but some students (and instructors) prefer a lower monthly fee, with add-ons for testing, additional classes, sale of gear, etc. Either way, it's more about the total amount paid and the value received, rather than how it's structured. There's some evidence, by the way, that giving students multiple ways to pay more if they wish (product sales, additional classes, etc.) is more stable in some ways than trying to charge every student the same price every month.
