I have to wonder how much of this middle management heavy organizational structure was introduced by cultures that place undue significance to 'becoming a manager' in computing success in profession.
Big teams need management. Small teams, less so. The largest tech companies are larger today than ever before. And there are more tech companies above virtually any threshold now than there were then. It follows that the average person in tech now works at a larger company than previously.
The number of people in small start-ups may be larger than ever before. But, because of the distribution, they're outnumbered still by those in large organizations that require bureaucracy to stay aligned.
There is a cultural component to it, and it travels. People coming from a corporate culture attach value to these titles in a way we traditionally did not in Silicon Valley. The interesting thing is seeing how they then breathe power into those words; I remember one senior-ish person who proceeded to attempt pulling rank on her peers on the back of the new title. In most cases, it didn't work. But in some cases, it did, including with people who were otherwise insensitive to titles.
My broad takeaway is trading titles for money is a deal with the devil. Eventually, the thing you're giving away gains animation.
I counted maybe 4-5 managers with some variation of Director/VP of Software/Engineering/SWE/SWEProject and yet more kept getting promoted into that echelon over my time there, with no clear indication of what most of them did. For a 400 person operation that did two giant layoffs.
On my end though, management was worse than useless and did absolutely none of the things that good managers I’ve had previously (or subsequently) have done.