Having worked at some dysfunctional companies where that didn't happen (and a few companies that were amazing at it), it makes a difference at scale.
Nothing is more disheartening than working your ass off as an IC, shipping, then finding out that your VP pivoted approach and your project won't be used.
The Peter Principle is of course well-known, but one of the insidious things is that once you have enough incompetent management and they are entrenched for a while, they will teach all the wrong lessons to an entire generation of new hires coming in. Due to the incentives and optics of large orgs, managers tend to spin everything in a positive light publicly, and the real unfiltered discussions of failure happen in tighter circles. At some point a lot of "successful" folks can have job hopped their way through a bunch of brand name companies just cargo culting on what they've seen done before with no real understanding of how their work actually impacts the company's bottom line.
This is one of the reasons I'm incredibly thankful to have spent most of my early career in small companies and startups where the big picture was so much easier to see.
Middle management is playing a completely different game. I don't envy them one bit.
Sure, there are toxic cultures created by bad management, but that can be said about any leadership role. There is a reason for the hierarchy, if you think you have a better approach to structuring a company, have at it.
One could even argue that middle management is THE most critical role in corporations over a certain size. In that it is the glue that allows them to get to that size. But it's also what gave rise to things like Dilbert and the idea of rising to the level of your own incompetence.
Middle management is like the lug nuts on a wheel. If you start with 5, you can take one away and be OK, even two and no issues with normal driving. You can go down to two and as long as you aren't hitting large bumps and they aren't adjacent you mostly likely will be fine for a short trip. You could even remove ALL of the lug nuts and if you travel in straight line over a smooth road you can still drive.
After all they mostly just sit there, the tire, the transmission, all the other parts of the car are doing the work. But it's not fair to say that any of the removed lug nuts were doing nothing.
The point of middle management isn't really to do anything spectacular on a daily basis. If the company is working well, middle management effectively has no function. It's when things get out of line. Even then though, it's not really middle management that's calling the shots or fixing the problem, but they are critical in noticing the problems and directing resources. Middle management's role is in reducing the time that things are out of line.
At least that's the idea, and much like any position, the bulk of the group benefits are overwhelmingly produced by the groups most effective producers.
Middle management is the hardest role to hire while simultaneously being the hardest to gauge employee effectiveness.