I agree that there are benefits to cross-training employees, which is especially useful when they discover new better ways of doing things, or automate a process.
The counter example can be developers who are bad "people persons" and might quit or dislike their job as a result this strategy.
I think the important part is that the company is transparent about goals and takes employee feedback seriously.
Before Hacker School, I never realized how unhelpful this was. The naive logic is, "well, I'm genuinely surprised that this person didn't know this". But in the grand reality of things, all of us know very little. Even experts in one area, don't know basic things in another area. By removing the shaming of admitting what you don't know, Hacker School encourages everyone to move past that and help each other learn.
I spent the past 7 years doing project management, and have decided to go back to programming this year. I'm brushing up on technical skills now, which is easier than you think, given how many online and offline resources are widely available.
Being willing to take a pay cut is important, but think of it as a tradeoff for the rewards of more interesting work. Also you can leverage your PM experience.
Definitely do it! Good luck.