I always thought that the peter principle is very flawed, in that it assumes an increasing level of competence required per job, and people whose qualities are static.
About the first, being manager is not inherently a more difficult job than being a senior IC. It's just a wildly different skillset.
About the second, reaching a position you can't do does not at all mean you'll never be able to do it. We learn.
The right insight there is that the switch to management as a necessary step to grow is horribly handled. But "leader as a profession" sucks as well, managers fundamentally ignorant of the kind of work they're managing.
I think what we need is a more fluid relationship between work and learning. We assume a college->work pipeline, when maybe we should have career stages at which we go back to further learning.