It is not title fetishism, it is quality control and it is very good. This means that when you want to have someone working for you, you can be ensured the person as the adequate formation. I am French, having spent a couple of years now in Germany, some in Denmark and before some times in the US, I can tell you this is wonderful. If you need someone to fix something in your house, you can be sure he knows about it. Not like in the US where the guy was turning steaks at McDo before and just happen to now do plumbing for a small company because "He did well at the interview".

This level of "quality control" is everywhere in the German society.

For the titles themselves, this comes from the general German culture, I heavily recommend "The German Genius" by Peter Watson to understand it a bit more:

http://www.nytimes.com/2010/07/18/books/review/Ladd-t.html?p...

http://www.amazon.de/German-Genius-Renaissance-Scientific-Re...