This is the kind of argument that you see from "stage 2" or "stage 3" management teams installed at a startup. These are the people brought on when the investors or CEO decide (mistakenly) that they now need "real" management, and then proceed to hire the worst possible kind.

This kind of management strives to guide the now-profitable and low-risk venture towards a state of permanent mediocrity; the remaining smart, stellar people merely stand in the way.

The new management's desire is to secure their position in the organization by instituting policies that require that information and knowledge flow through them, amassing a greater base of direct and indirect reports, and redefining their internal metrics of "success" in a way that's genuinely divorced from external reality.

The Brilliant Jerk in this situation should be promoted, the new management should never have been hired.