I think rank difference is a very good estimate for handicap settings. That's the whole point of it, isn't it? You'll only know the real strength difference after a certain number of games but it's a good starting point, especially if the difference in rank is very big. An even game with a player who is many stones weaker can be very annoying especially when the weaker player refuses to resign despite a clearly lost game (which he maybe can't even see).

When I play someone on a real board for the first time, I usually go with the rank difference or one stone less as a handicap. But I'll also gladly play even games with someone about 2 stones stronger or weaker. Even games are the best, after all