I am an L Grad, and do judge an ocassional upper level ride, above the level I've ridden including GP rides. It is OK, its a SCHOOLING show. Although I do have a good eye and have done enough education to have a pretty workable knowledge of what good (and not so good) FEI work looks like.
Just because a person hasn't shown through a level doesn't mean they don't have the eye to judge it. There are several higher level judges that were promoted into judging ranks before USEF and USDF started their training programs and judging criteria. Some of those judges did NOT show at the higher levels (I can think of a few S/I/O judges who haven't shown above 2nd level).
Interestingly, under the current judging criteria, an r and R judge must be showing above the level they will judge, while and S judge is not required to have GP scores. Go figure.
BTW, a good rider or good trainer does not necessarily mean a good judge. The skill sets are quite different - judging is based on a good eye, a good succinct vocabulary, and a quick reaction between eye and vocabulary. Riding/training is much more about feel and physical ability. Going through the L program, we saw some great trainers and riders struggle with the process of judging.