The problem with the Peter Principle was that many of not most people have room for growth. We get in over our head and then manage to learn new things and, literally, grow into it. Or, we learn our limitations and back up. People do both these things all the time. The problem are the people too damaged to learn. They understand that they are are incompetent. We think of them as dangerous because they are but they are usually also basically incompetent and there success was a result of being able to hide their incompetence. Lots of money is the most common way.
So there is an evolutionary process here and we see it very clearly with Trump et al. It is a protection. But the collateral damage is still scary.