You're absolutely right. The only people that move up to management are the workers who are good at their job and terrible at managing. Thereby creating an even more inefficient company with no good workers and poor managers.
Funny, but I cannot recall when Peter F Drucker covered the sharpened pool cue approach to management. It must be some new variation on "the stick and the carrot" (enhancing the effect of the stick and eliminating the carrot).