I agree with you. Regarding your question, I think it will take the average of everyone's skill and use that when matching you up with other players.
To the guys who are gonna moan and complain about this:
I'm sorry you didn't get to show off your skill, but it's not the end of the world. Halo isn't all about showing off, it's also about having fun and a good time. Sure, it's fun to have a visual rank that says you're better than everyone else, but... We'll survive, won't we?