tmmorris,
A little unfair in some cases. The stereotypical recipients of military MBEs are hoary old WOs with no aspiration for commissioning, or Flt Lts / Sqn Ldrs who have long since fallen off the career ladder. None of these will be promoted but continue to give dedicated service which only receives formal recognition in the shape of some sort of award. Same is true (to a lesser extent) for OBEs and CBEs as officers hit their career ceiling higher up the ranks.
Of course there are some who gather these gongs while also climbing upwards, and you may have a point in thoses cases. But how do you write a rule that only makes those with no further promotion prospects eligible for awards?