It's important to distinguish between two kinds of clerical titles:
- Those that derive from the reception of the sacrament of Order and indicate a permanent character in the recipient's soul, which can never be taken away and persists even beyond death
- Those that indicate an ecclesiastical office that is held by appointment or election for a determinate period of time and can be resigned or taken away
Titles deriving from the sacrament of Order: bishop, priest, and deacon
First a note on priesthood: Catholics affirm the common priesthood of the baptized, but distinguish it from the ministerial priesthood. The latter is conferred by the sacrament of Order for the purpose of offering the Eucharistic sacrifice, administering the other sacraments, and governing the Church.
A bishop has the fullness of the ministerial priesthood and is himself a minister of the sacrament of Order, and is thus able to perpetuate the ministerial priesthood. The apostles ordained the first bishops (e.g., Timothy and Titus) and charged them with the governance of particular territories.
A priest has the ministerial priesthood somewhat less fully than a bishop, who delegates some aspects of his ministry to his priests. A priest can offer the Eucharistic sacrifice and administer most of the other sacraments, but not the sacrament of Order. Priests serve in a sense to extend the local bishop's powers beyond what a single man could accomplish.
A deacon is a privileged assistant in the liturgy and in the temporal care of the Church. Catholics understand Acts 6:1-6 as documenting the institution of the diaconate.
The Catholic Encyclopedia entry for bishop has an overview of various theories about the historical development of the distinction between priest and bishop. It sums up as follows:
During the first three centuries, the entire religious life of the diocese centered around the person of the bishop. The priests and deacons were his auxiliaries but they worked under the immediate direction of the bishop. In large cities, however, like Rome, it was soon found necessary to hand over permanently to the priests and deacons certain definite functions.
This doesn't sound too much different from the idea you proposed in your question. It seems to be in that "handing over of definite functions", which in some sense continues even today, that most of the various offices in the Church have arisen. And as new offices arise, so do new titles for the holders of those offices, as discussed below.
Titles deriving from temporarily-held offices: pope, cardinal, etc.
Now the office of Pope is unique. Formally, the Pope is the bishop who holds the see of Peter -- he is thereby the supreme pastor of the universal Church. Catholics believe that this office was instituted by the Lord (Matthew 16:17-19 and John 21:15-17) and is a constitutive element of the Church; nonetheless it remains an office: temporarily held, able to be resigned, and in no way bound up with the reception of a sacrament.
The cardinals are the Pope's hand-picked collaborators in the governance of the Church; usually he picks bishops but there are occasional exceptions. The cardinals have unequaled privileges and responsibilities in the Church but their office derives in no way from a sacrament -- it is simply at the decision and announcement of the Pope that a man becomes a cardinal. Originally the term "cardinal" referred to the chief clergy of any prominent diocese, but eventually became reserved to the cardinals of Rome; the old Catholic Encyclopedia gives a lengthy historical overview. I've seen a couple of references recently to the possibility of the Pope removing a man from the cardinalate, but I don't know if this has ever actually happened.
Then there is a plethora of lesser Church offices which have particular canonical privileges and responsibilities, but again are held temporarily and by appointment. These include:
- Pastor of a parish
- Abbot of a monastery
- Superior of a religious order
For most Church offices other than the papacy it is perfectly clear that the office is of human and somewhat contingent origin, and simply developed historically as the need for it arose.