The idea that people who are incompetent at higher ranks were, in fact, competent at lower ranks seems to fall apart at first contact with reality. Combined with the notion that people arrive at a place where they are incompetent but otherwise well-intentioned or benign, it makes the peter principle look almost wishful/fantastical.
In order to understand actually existing organisations, you are probably going to be much better served by the MacLeod Hierarchy/Gervais principle:
I prefer to think of the Peter principle as you arrive at your point of unhappiness rather than incompetence. Not everyone wants to be the CEO of a billion dollar company. Everyone has a place where they reach maximum happiness in there career. If organisation actively asked people if they wanted to be promoted then this could be avoided to some extent. It may require soul searching and difficult conversations though.
The hardest thing though is when the Peter principle occurs as organisations grow. The CEO of a 10 person startup might not enjoy running a 100 or 1000 person company. The skills required are very different.
In order to understand actually existing organisations, you are probably going to be much better served by the MacLeod Hierarchy/Gervais principle:
https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
Peter is basically describing the clueless in this setup.