As a several year veteran in the government contractor space and from personal experience as a configuration manager, I strongly disagree this this. I've seen poor and mediocre programmers survive as programmers well toward retirement age. Part of the reason is that programming isn't the only skill that they provide. They provide domain knowledge on the systems which the gov (mil and civilian) rely. Then us poor sods have to clean up after them and clean up after them, and hold their hands on radical new ideas like object oriented programming. I could really rant on this topic if I wanted to.
Another perspective: I mean, how many coders do you know that make it through a few years working who have NOT developed some significant domain knowledge?