This is in contrast to continental armies with aristocratic baggage who found it difficult to fire flag grade commanders (looking at you, monty.)
But the political risk to his own career was enormous and the only way he got away with it was with the full support of FDR and his reputation earned partially as Pershing's Chief of Staff in WWI.
He is also the only person in the US Army to be considered for the rank of Field Marshall, mostly because FDR thought it would be funny to have Field Marshal Marshall.
Which is to say... you might be able to cheat the Peter Principal, but the amount of effort seems great and you would have to work very hard to sooth the egos of those demoted or reframe the demotion as a lateral xfer.