Xevois, Gradius, and the like had a pretty simple rank mechanic in place though. I believe it gets harder the longer you play on one life?
Zanac changed that up. The game gets harder based on how much you shoot. So, as far as I know, this is the first "controllable" rank, that actually encourages the player to hold back a bit and interact with the rank to control the difficulty. Gun Frontier did the same thing, using auto fire on that game makes it way harder. I performed much better in G&F without auto fire then with it, probably the only shmup I can say that about!
I think it was these games that lead to Battle Garegga and its infamous ranking system.