I think there's a third explanation: the person being promoted may indeed be incompetent at the job they have been doing, but be good at the skills required of a manager. I've seen that one happen. Management has very little in common (in terms of skills needed) with doing the work, so just because someone is bad at their current position doesn't mean they'll be a bad manager.

I'm so happy to see this reply chain at the top of this thread. I really wish we could stamp out the snobbery of software engineers thinking they understand everything about everything because they understand Rust. As the current topical example, AI companies saying they can replace XYZ professions with LLMs. Doctor's for instance, don't just do diagnosis and data processing. A huge part of the job is sympathy and understanding. Although I'm sure someone will say that AI can fake that too.

To add an anecdote to the list, the best development leads I've worked with weren't the best developers on the team.

Or vise versa. That ass kisser with no work life balance might be a fine IC but you make him a manager and he'll act like a slave driver and burn the whole team out acting like that.