It's a lot like Boy Scouts. The parents want to see progress, and so the belts are handed out to any kid who checks off all the requirements, which mostly consist of memorization and a minimal standard of physical fitness. It's a business, and doing that works better for the real customers: the parents. It certainly works for the OP even though his kids are obviously not learning how to fight ("His Karate dojo is wonderful, and he loves doing it. It's actually a very gentle dojo..."). A lot of kids love to do it anyway. I was just disappointed that my main purpose for studying karate was mismatched. I'll also grant that there is a small element of "getting out of it what you put into it" as well.