I don't want to go down this rabbit hole too much because it really, REALLY, isn't that important, but I've seen the letter-tier system used to rank dungeon difficulty or the viability of specs in WoW, the best aesthetic skins in Fortnite, and the various characters for each role in LoL, which are the 3 most popular games streamed on Twitch. The concept isn't so ubiquitous that it's impossible to avoid, but I was first exposed to it back in the 90s, and I've only seen it in more and more places over the past decade or so.
Really, it isn't so much a system as much as "getting an S rank" or "being S tier" is simply a commonly utilized piece of video game jargon.