I wouldnt say it shows how good you are. Just how long you have been playing. I like it because its something to strive for and keep the game interesting.
Here is my take on prestige. Without it there would be no major popularity with CoD 4 online as long as it has been. The only reason they put it in the game is to keep people in the game. So they can say haha im 5th prestige your only 3rd. Haha. Because they know it is the competition that is going to keep most people going for the Golden Cross. It is just like the same reason they made challenges and Golden guns. To keep people buisy. And once you get all the challenges/golden guns/lvl 55 golden cross your not just going to walk away from the game because of how much you put into this. I think prestige is a great addition to this game. It is what keeps the game alive.