It's nice to see someone else (unsurprisingly) reached identical conclusions as me! I would like to try adding a 3rd reason: dumb subordinates don't upset the apple cart because they don't really have the capacity to do so, and people in power hate upsetting the apple cart as they love the status quo that puts them in power.

Smart, moral people have practically a compulsion to improve things, or at least call out idiocy.

I would also add the need for an actual reason to promote the PHB, and I would argue that one quantifiable way upper management can try to argue for a promotion of the PHB is how "hard they work" (regardless if they achieve results or not). Putting in many, many hours also help promote PHBs who will defer to authority.

It also helps explain the phenomenon where the manager class becomes soulless. Institutions that focus on preserving their own power rather than creating value will promote people (at least to middle management) who are willing to put their nose to the grindstone, sacrifice their health and relationship, producing nothing of value, all to walk on some concept of a career treadmill faster.