I'm making a game right now, and I'd kill for a good game designer.
The gap between "high level goal" and "features to implement" is just as complex and squirrelly as the gap between "features to implement" and "lines of code".
I work on a project with a decent ratio of engineers:designers. A good designer is not just "ideas people", they are fairly technical without getting into the nitty gritty.
If one side gets too much power then it can land in situations like you describe (design makes unrealistic requests, or engineering over constraints the product). When the balance is right then working becomes quite amazing, nothing better than seeing my work (engineering) used to make stuff I couldn't even think of and I can see the appreciation of helping design make their vision come true.
A "product designer" is someone who got daddy to fund their "gentleman's Cs" MBA degree and then posts online saying they have a brilliant idea for a company and they just need to find some programmer to implement their grand "Facebook for Dogs" idea and they'll graciously give them 20%. Someone who idolizes Steve Jobs and whose eyes glaze over when any of the actual fractal complexity of the world is presented to them.