Job titles are like any other currency, you can use them to pay. They are typically used to pay when the most widely used currency (money) is not available. You pay with job titles when you hire (in the end, you are not going to risk a key hiring for not giving the position a flashy title, right?) You also pay with job titles when you reorganize. Sometimes you pay the winners in the reorganization to motivate them even more into their new responsibilities. Sometimes you pay the losers, to compensate the hit of not being in top of the org chart, while still being valuable people. You basically don't give a shit about it and use it indiscriminately to avoid problems. But that leads to inflation.
On the other hand, you do accept job titles for payment. You can't help think of how cool will it be when your friends ask you what do you do now. You picture it in your business card and feel the recognition of your counterparties in all those meetings. You believe it will translate into real value if you leave the company, and show your resume to a new employer. You fool yourself because you don't count on job title inflation.
There's inflation when flashy titles are overused and they start to mean nothing. It happens overtime. Inevitably. Policies are very dependent on the neighborhood, varying from country to country and company to company. Mine has gone from responsible to manager to officer to director to managing director. Right now the "new peso" seems to be the head. And suddenly we are all head of something. And I see myself appointing heads all the time because my team is less than nobody's. Fool. But you give into it as with so many other social conventions.
Sometimes the central bank (human resources) finds it out and suddenly starts limiting the production of this currency. That's when a "really new peso" has to be coined. I still don't see a clear trend of what's next and we will probably live in the head era for some time still. If I had to propose something, given my Spanish condition, it would be to adopt a more royal fashion. What about the Prince of Product Development? Or even the King of Procurement? Just imagine that business card! Oh God! Picture the face of that next customer when she needs to read that card TWICE to believe. Priceless.