It can work both ways. A brilliant employee who is hard to replace can add a lot of value to a company. If you insist on creating a process where developers are replaceable cogs in a machine the output you get will look like something that came out of said machine.

Managers should encourage employees to become highly valuable and at the same time manage the risk of those employees leaving some day - preferably mostly by creating the right environment for those employees to flourish.

I don't agree with my boss a lot of time. Recently he brought up the concern that "what if" something happened to me? He has a solid concern, I told him that it would be and is wise to have another developer on par with my knowledge and skill set. He said he doesn't want me to leave (sometimes I question that, because I'm not his deisred "yes" man). I've been on the fence for a long time about whether to leave or not, because of him. I enjoy most everyone else and the product we build/sell and company. After thinking about this more I realized if we do hire someone to cover me while on vacation or if I have an accident... the social norm/aspect/idea of duty and obligation to help and support my fellow co-workers would be lighted on my shoulders... making it easier for me to leave!

Surely that does happen but it wasn't my case.

The option was basically not doing it. Since I made up for my cost it wasn't a bad idea I guess. Now if I get struck by lightning then they will lose future earnings but that's that. It's a big company and other parts of the company would continue just fine.

Not all resources are exchangeable, esp. when some niche research is involved.