Good point. For decades the education system in Germany tried to eradicate differences between universities. For the longest time there was also no separate bachelors degree. Getting a doctorate was therefore the only way to distinguish yourself from the student masses.
This has changed in the past years after the "Bologna reforms" have replaced the German diploma by the international bachelors/masters system and since the "excellence initiative" has given "elite" predicated to some of the German universities. Ironically this initiative was governed by the education department, headed by Mrs. Dr. mult. Annette Schavan.
Let me delve into the speculation about culture a bit more: Back in the day of the emperors/kings, titles and medals were were an extremely cheap way of rewarding somebody without actually paying them. What this incentive system needed to work was a society that respected those titles, so you were and and even today are allowed to use those titles (examples: http://de.wikipedia.org/wiki/Nichtakademischer_Titel). This attitude was probably transferred to academic titles at some point.
In Austria, which has even more artifacts of its imperial time, this title-mania was followed so diligently that even the wife of the doctor was called Frau Doctor until a few decades ago. Also, every academic title at least equivalent to a master's degree is still used with your name in any formal dealings (they will call somebody up as Frau Magister Maier in a waiting room etc.). In Germany, they do this only with PhDs, so there is Herr Doktor but not Herr Diplom Psychologe.
Judging from the mini-bios of authors on books, though, the Germans seem as title-crazy as Austrians. The guy who cannot call himself "Diplom Psychologe Hans Maier" on the title page of the book will almost certainly start his bio with "Hans Maier is Diplom Psychologe ..." because this way, he is only describing academic achievement (OK) and not using it as a title (not OK). So people who worry about status love titles but can only actually use anything from a PhD upwards with their names. Go figure...
Strictly speaking, in Germany you don't use the PhD (Dr.) with your name, you just use your full name. Getting a "Dr." is a name change, while getting a diploma or masters degree is not.
Strictly speaking, it's not. You can write your PhD in your passport (only in the long form, like "Dr. med.") in a separate field, but you don't have to, and it won't be part of your name anyway.
Then why does my German national id card have the text "Dr. Hars" (short form, without the "rer. nat.") in the field with the label "Name/Surname/Nom"?
