The Peter Principle equally applies to those who have to serve under others who were promoted out of their competence zone. It works in multiple ways: don't allow yourself to be promoted outside of your competence zone, don't work for those who have been.

>People should be made people leads because they are good people leads, not because they are good ICs.

Good people leads don't lead people whose jobs they can't do. That's the point: if your boss can't do what you do, he's not leading - he's letting you lead, while following along on an elevated, speciously constructed platform.

Don't fall for it - always demand competence from your own leadership.