You would be correct if proof of challenge was the only reason people desired to climb ranked. You would be surprised how many people do not actually care about the rank but will get it due to 'Dynamic Boosting'.
The people who would care for the reward of ranked due to the challenge are Achievers (the type currently getting shafted due to Dynamic Que). The type of people whom Dynamic Que is designed to attract (and are being 'boosted') are Socializers, who care more for their ranks as a social status with those they play with.