They are arbitrary in a way but remember that the people scanning over the resumes are not technical people, for them its important that a skill is there and thats about it. Finding a job is more about social skills than technical ones.
Because resumes aren't evaluated on maximum information density (and sometimes sparser resumes even do better).
I don't care for skill self-ratings as a concept either but these are placed in what would need to be negative space anyways. If you're committing to a skills list, removing the rating dots and stuffing more skills in their place probably wouldn't have a positive effect.
