It's because that boss is part of his boss army in the company's game of throne. Don't turn lightheartedly a supporter into an enemy.

It is because people prefer a known bad employee than a wildcard.

With the first you can prepare for their fuck-up, with the unknown things could be a lot worse.

I've had a boss like that and his boss didn't want to remove him because he would have to admit that he made the wrong choice in promoting him.

Excellent point. I'm pretty sure this is a thing, I vaguely remember reading something about how getting promoted gives you some "invisible leverage" (my words) because now the company has decided you are valuable and special and they don't wanna look like they made a mistake. Thanks, this actually helped me understand an instance of where several not very good managers got further promoted and it made no sense to me.