I have a strong gymnastics background and it drives me crazy!
I'd love to see a program where someone not from your gym has to sign off on athletes mastering the skills at each level. USASF could have a program where there are "skill certifiers" who are not affiliated with any program (they don't coach anywhere). These skill certifiers can be scheduled by each gym to sign off on each athlete's skills for each level. The highest level that the athlete has mastery of (can hit, 10 out 10, on 80% of the skills in a level....or can hit all skills in a level with 80% accuracy).
In gymnastics an athlete has to meet a minimum all around score at level 5 before she can move up to level 6. She then has to meet the minimum all around score for level 6 before moving on to level 7. This means that an athlete may spend more than 1 year at a level.
This could also take the heat off the coaches as to why an athlete is at Level 3 again, the coach can simply point out that the child didn't pass on to Level 4 in the skill certification session.