The fact of the matter is this, management _is_ a promotion, because you get paid more and you gain access to more powers. If it were _not_ a promotion within the company, no one would take it up.
Management is a simple deal, you give up power _outside_ of the company for power _within_ the company. It is far easier to join another company as an Engineer than it is as an Engineering Manager.
However, I agree that it should not be. It should not be there to create a sense of hierarchy. This is why, I believe that you should rotate your managers _within_ the team. Back at my old company, we had people who would go into a Team Lead position for a certain project, and then someone else would take over.
Pay was already high, so no one really wanted to take up lead because it meant more responsibility.
This is how power needs to be treated, you should not have it for too long. This is why we have term limits.