For the record, I'm not sure I consider titles in any particular form to be a problem, per se. I can kinda understand where Matt is coming from (i.e. bloody-well everyone's been a member of the Legion of SuperHeroes, to the point that if you -weren't- a member, you probably did something wrong, but how do you distinguish between the ones that really matter like Bats vs. the guy who was in a team-up this one time but was never heard from again like Tyroc) , but I think a lot of good points have been raised in support of their use and frequency. That said, I think the "cheapens" complaint that Matt has is a function of proliferation - titles are a low-cost, no-maintenance method of rewarding players, and over time a lot of them go out, for a variety of reasons. I agree that they add to the story of each individual character in one way or another. Part of the issue is possibly non-standardization of titles - "Lord", for example, is low-court title in some (most?) chapters. Oregon's previous campaign had that title confer significantly greater rights - more in line with a Baron or Duke. Ashbury, based on my own experience, has its own protocol and etiquette (the kneeling and recognition bit) and such. Adding fluff titles confuses the issue because who knows if a "Warden of Truth" is intended to be a but of fluff, or confer certain law-upholding rights, or judicial authority, or what. Tack on simpler things like "Ambassador", and no one knows if that means you have political authority or you're just trying to be the go-between.
Cross-chapter traffic confuses the issue a bit more - Gregor, back in his early days, loved using it to his advantage. Again, he was a gypsy given a noble title, and he used it some very (oog) abusive ways. For example, when a magistrate tried to arrest him, G sent him packing under the guise of "You're only a Magistrate, not a Lord Magistrate, you have no authority, go away". When some gypsies had been arrested, G walked and said "Okay, thanks for capturing them, I'm a knight, I'll take them into custody, shoo shoo." and then letting them go. Those are cool in terms of a single character's story - gypsy gets authority and wreaks a bit of havoc. From an out-of-game "players should respect what it took to get the title" kind of way, it's probably not a shining example of what anyone would want advertised as "this is how you become a knight".
Part of it, of course, is that neither the NPCs nor the plot team were quite ready for these sorts of things - they never had to deal with it before, and had no standard "how to deal with this" in place. Add to that the social support the character had in establishing his title, and it becomes more problematic from the standpoint of the plot team to deal with it in a way that is rewarding to the player, expanding on the story, supportive of what the local plot team wants to tell as a tale, and constructive to the overall player community. I.E. do you really want to lay down the hammer on such a character if it subverts your awesome story about the nobles representing truth and justice and turns the weekend into an adventurers' civil war?
There's also the in-game social aspect of titles and characters. Gregor's knighthood is given a nodding recognition in a few chapters, but even in the chapters in which it is not recognized, people will generally refer to him as "Sir Gregor", particularly in more formal or presentational situations, while around a campfire with friends and gypsies or when someone's about to smack him in the back, it's a shorter "Gregor" kinda of thing. But by and large, most people will simply accept another character's title as the default, and only make a point of not using it when they are specifically targeting someone.
Is it bad?
From an in-game cultural experience, I don't think so. Having "Lord" mean "someone's second cousin twice removed who wanted some pomp and circumstance" in one land and "Dude in charge of everything" in another falls more on the Good Thing® side of the equation - it engenders crosschapter discussion, political roleplay, and the potential for character-vs-character drama. Yes, there are potentials for watering down the value, but I think that falls more on the side of having a plot team that is ready and quick to respond to such issues in an enjoyable manner that strongly supports the local titles over the visiting ones, and has ideas rolling around on how to handle characters stepping outside those bounds.
From an out-of-game cultural experience - I'm about fifty-fifty. A large part of it has to do with what sort of plot support you provide. BGA writeups and a few extra coin isn't enough to make a title have strong out-of-game value. There needs to also exist a certain greater degree of plot support. For Oregon, we make sure our "townfolk" NPCs are aware of who the local ranked nobles are and try and make sure they treat them with deference. It helps make a clear distinction between "fluff title" and "rank title", which in turn helps prevent dilution of the importance of those titles. It also makes sure that the local titles are given preference over the visitors.
