My company does this all the time. Didn't do well enough at the job interview or you're a total bozo and poor at understanding technical concepts/writing code? No problem! They'll appoint you as a project manager and you will get a team of developers to manage. At the same time, the brightest and the best engineers rarely get promoted because they are keeping their heads down and actually getting shit done. And there is little incentive for the company to promote such people because they lose a skilled and productive programmer if they do that (they don't care about anything except for how fast you can crank out code - one of the typical ailments of consulting companies).
It's a very sad state of affairs. Makes me want to quit really.