this seems a bit like a false dichotomy - I don't think that's how the software industry is structured. Maybe it's how companies with dev teams in _certain_ industries are structured. I've even had managers in the past who did deep work in addition to doing some of the more logistical work of project planning / story breakdown and it's almost a basic expectation that a senior engineer be hands on with the most complex, business-critical systems

I agree if companies don't have non-management tracks for experienced engineers. That does result in the environment you're talking about in about the worst way where your most experienced eng's are unhappy / hate managing and inexperienced eng's are stuck with bad managers