Yes, that is the exact kind of ritualistic barbarianism that modern societies should be avoiding. There's nearly endless better ways to have that money spent, even before you get to the "blood" part of blood diamonds.
> Simply wishing that these signals didn't exist won't make them go away.
No, we try to make the case for the waste and stupidity, and when a group still can not come to terms with it, we shame them.
If you need money to show your devotion and dedication to a relationship, you will be having a hard time. A relationship makes sense as long as parties enjoy each others company regardless of the size of diamond on the finger.
If something external, such as an expensive ring, is to keep the relationship afloat, I have hard time seeing a point of living and sharing your life with someone.
only immature people with little real relationship experience would consider this childish signaling worth a dime. the only signal being passed is bowing to peer pressure just because you don't want to stick out
Signals are an essential aspect of human behavior. I don't think trying to eliminate signaling is a productive goal.
You yourself brought up the "social contract" of marriage. A contract is not very powerful if there aren't consequences for breaking it. So that's one crucial signal: we are committed enough to this relationship to spend money on something which is only useful as a signal.
There's also the signals of "my mate is wealthy enough to buy me an expensive diamond" and "he cares enough about me to spend a large sum of money on something which has no useful purpose besides signaling his love for me." Simply wishing that these signals didn't exist won't make them go away.
Useful things make poor signals because you might buy them without any intention of signaling anything. That's why glasses are a worse signal than jewelry, even though they cost just as much: you might be spending money on glasses because you need to see, not because you have money to burn.