I play God because it's exactly that. A game. I designed it. I could even make a game where you begin dead and then your whole game is becoming alive. Or where you are rank 81 and your whole target is to lower to rank 1. In fact, it's not called God, it's called game designer. Not sure why you would say that's playing God but anyway. I would suggest to try Populous, I loved that game as a kid, where you are a God and have to create a civilization. It became one of the best games ever made (Clash of Clans and a whole set of new games on that genre are based on it).
Going back to the subject, nobody lost their rank. If you were rank 31 (which was called MORAF back then), you were still rank 31. Only the names changed. Names have changed multiple times during the years. To begin with, the first versions had no rank names, only numbers, so you would be rank 1-12. No name attached to it.
Then names were added to those 10 ranks or so.
Then the ranks grew to 21 and I had to made up names for them (yeah, I played God as a game designer again, it's kind of a mandatory requirement to do so when you design the game). There is NO thirty one possible ranks on the military so I had to made them up. Adding things like Aspirant 1, Aspirant Level 2, Wing Commander 1, Wing Commander 2... and everyone adapted.
At some point I increased the ranks to 31 with more and more fake names.
then more ranks were added up to 47 when World War 2 was introduced. Of course, it was impossible to add more names without rewriting the old ones. I had to look up several sites to try to come with some realistic sounding names to fill the ranks, even merging names from different armies across the world. Honestly, if you want rank 31 to be still named MORAF, then 32, 35, 41, 42 what would be the names for the new ranks? Space Master? Aspirant Owner Of The World?
Sure, I can go back to 31 = MORAF, then give me new names after MORAF to represent level 32 to 47 and I'll be happy to incorporate them.
For everyone else, everybody knows nobody was demoted. It was just names changed. You were rank 31, you were still rank 31. Names just adapt to new versions. Heck, I may even have to change them again or translate them to multiple languages so that MORAF would mean absolutely nothing in Chinese, Russian or Spanish and each language would have its own name (which by the way, it's exactly how it is in real life). Then if you switched languages from English MORAF to Spanish WHO-KNOWS-WHAT, that person would complain because they are not MORAF any more? They are the same rank, just different name.
I just made the decision as the game designer that MORAF should remain the name for the highest rank. If you prefer MORAF to be back to rank 31... so be it. Now there are 47 ranks. If the game keeps increasing in size and missions, I may need to add more ranks, let's say to 57. Then what? People that were rank 31, 3 years ago, should automatically get rank 57? No. Those new ranks should not have any names whatsoever because MORAF is owned by rank 31? Nope. Or maybe, if you are able to come up with 20 or so new names that sound better than MORAF you can keep adding ranks.
As for your comparison with the navy that you are never demoted, that's not true at all. If you look at the history of the army, names for ranks have changed constantly. There were not always the same names and ranks than now. In fact, whole new divisions have been created (airplane pilots did not exist in 1800s) and divisions merged or discontinued, with all their ranks gone and replaced by different ones. Exactly like in the game. Did people like it? Obviously some soldiers did not. Just search for some documentation on the subject. People get attached to a "rank name" not a "rank number", so even if you as a soldier are exactly in the same position on the ladder, some would complain. Most people do not like change, especially in the military. But the generals had no other options but to adapt to the times and create those ranks, merge units and adjust. See the similarities?
Now back to playing God. Version 1.0.73 was just released on the announcement section. I added weather. I may even throw in some lighting at players when I'm not a in a good mood.