I think people should be able to swing back and forth; manager for a year or two, engineer for a year or two. I don't believe everyone can be happy with a prescriptive path to follow -- I can't only be one or the other for the rest of my life. I like leading, mentoring, and developing teams. I also have strong inclinations towards inventing solutions and developing the future generation of technology.
I think businesses need to be able to adapt people to different roles and be comfortable moving people around and let them change over time. Otherwise we'll have people hopping off to new companies every few years as we tend to and taking all of their domain knowledge with them.