What size of team are you talking about (i.e. number of engineers)? The situation you describe might be related to the clarity with which product boundaries/scope is defined. In a product team of 5-10 engineers and one product manager, it's unusual for any individual engineer to be working on something 7 layers deep in the context of that team's product, without understanding why.
If you treat product management as divvying up features and assigning them to engineers from an undifferentiated pool, then the situation you describe is very likely.
Plus, some engineers are motivated by seeing the software they build get used and solve problems for the users - bad project management certainly makes this less likely.
In many cases of smaller startups, the CEO or another person with a different title is probably acting PM (per hluska).
My hypothesis is that leading the whole engineering organization to understand the unity of the product is not the role of engineering managers, nor of the C-level execs, but specifically of the PMs. Can anyone point me to literature/blogs/etc. that support or refute this hypothesis?
Lots of companies take different approaches here. I've worked for startups where this has come from the c-suite, lead developers or product managers. I would like to learn more about this too.