Unfortunately this form of reference and address is not limited to the civilian population of the Pentagon but has crept into the general language of serving personnel as well. More than a few grump that this form of address or reference should be restricted to the paymaster. Yet most not only tolerate these expressions but use them in place of the official designations, thereby contributing to the decline of respect for the individual, his or her service, and the armed forces in general. What might be excused as an ignorant omission in the case of a civilian becomes an insult in the mouth of another officer.
Interestingly this diminution of rank does not seem to carry down into the enlisted ranks. In part this is probably because few enlisted personnel interact with senior officials serving at the highest levels. Those assigned to such duties usually are so closely associated with their leaders that "Sergeant" and "Chief" or individual names will do for most and that narrow acquaintance can mask the ignorance of "Petty Officer" or "Corporal." There is also a weight of pride that risks rebuke—rebukes more easily made by senior enlisted personnel than middle-grade officers. Can you imagine the response to someone who would refer to the Sergeant Major of the Marine Corps as "E ten Kent"?
In spite of all the protestations about supporting our gallant troops, this tendency to reduce rank to pay grade is demeaning. Using pay grades as a reference suggests that money is the coin of the realm for those on active service. But rarely is pay the primary motivator. Motivating most officers of the services are the psychological rewards of honor and duty plus an affinity for the people with whom they serve. The titles of rank reflect these associations even when the old forms of address are used.
Once upon a time all officers in the Navy below the rank of commander were addressed as "Mister Last Name." The overall growth of informality in the country has largely displaced that form of address. But there are still times, places, and people for whom the titles matter. True to life, in the movie Ice Station Zebra the commanding officer of the nuclear-powered submarine informs the high-level civilian rider shortly after he boards, "We are very informal here. All the officers go by their first names. My first name is Captain."