As a data point, I work at a US company that ended up in this place and the same thing is happening.
In my BU there were directors with 2 direct reports. Even at the next level up, the number of non-IC directs is only high single digits. There are many managers who were already engaging technically with the product (not PRs but playing an active role in planning work) and they have no idea what directors are actually doing...aside from attending meetings with other directors.
Almost all decision-making capacity has been moved outside of teams which has resulted in almost no actual work (because everything needs to be cleared by someone with no engagement with product) and people leaving (because promo decisions are made by people who have no idea what anyone is contributing, the worst ICs are the only ones they can retain ofc).
It is a terrible environment to work in.
I don't necessarily think the manager should be best IC but definitely someone who is genuinely talented with sufficient scope and responsibility to make good decisions/add value for ICs. There are way too many passengers today.
Also, this is true of higher-level ICs. At my work, they have no real engagement with product so have influence through ambiguous statements about the general direction that get passed around like the word of God. None of these decisions, so far, have been helpful or relevant.
As one of those supposedly higher level ICs, I agree entirely with the assessment.
A decade or so ago, the high level ICs I interacted with were much more technical.
They were the kind who would perhaps not invent truly novel things--but plenty did in the right companies--but they had mastered their domains and genuinely solved thorny problems that others struggled with.
Nowadays, they are more political and less involved. I have met many that do not code or barely code. I've been in months of meetings to decide to do something fairly obvious just to ensure "alignment" even though no parties actually disagreed, just wanted to nitpick minor details that could just be a comment on a PR.