First of all Competitions and Tournaments, or Tests/Exams, are a great way to have fun if approached with the right attitude and it makes for a much more accurate ranking system. The little things could be worked out(E.g. Event timing to suit WoW's diverse demographic)
The Titles would have to be earned on a weekly basis.
As a battlegroup you have a completely optional Weekly that allows you to take 1 shot at a Challenge mode and you get Ranked based on your time, whoever has the best weekly times in the battlegroup get a temporary title they win and can only maintain by competing again the following week. Show weekly rankings to players(with permission) and give people a better idea of their skill level. This can also include a weekly 3-man, 10-man and 25-man normalized.
For Dungeons & scenarios you get the option to do either Normal or Heroic difficulty and can only choose 1 of the two. For Raids you get the option of Raid Finder, Flex, Normal and Heroic but you can only Participate in one.
Do the same with Arena/Rated BGs, a weekly tournament that is normalized for some temporary titles.
This would be a much better ranking system for both PvE and PvP and would allow players to find more people in and around their skill level in the long run.
Let's add more fun to the game, we don't always need gear to be driven to do something and this would give better data to Blizzard on how to improve their game.