Except for one thing: that isn’t the Peter Principle. It doesn’t say that the least competent person is promoted or that businesses try to find the job at which a person is least competent. It says they promote the MOST competent person UNTIL they become incompetent. The Peter Principle assured you that even though your boss was an idiot, (s)he used to be able to do something.
I agree this is much more a case of never being irreplaceable.