Middle managers don't provide direction; they are communication points. As to how effective they can be, it all depends on how the org is structured. If it's a product-centric organization (i.e. P&L rolls up under product and operating costs are charged back to the product org) then it can work pretty well. If it's a functional organization (revenue rolls up through a sales org on a regional basis and is combined with costs at the corporate level) then there's really no amount of management that will make it a good place for developers to work -- under the latter model, finance is running the company and you're a pure cost center. The manager's primary focus will be cost control, not product quality. That's a bad situation to work under.

I agree with your second assessment, but it's more of an issue with the consultoware business model than anything. Most consultoware shops start up thinking they're going to get hockey-stick growth, but it turns out every implementation is super-custom and it ends up as a consulting business. Many companies fail to realize this has happened, and end up operating like a software company when they should be operating like a professional services company with hourly billing. Under a professional services model, if a customer wants a feature, you can quote them a price for developing and implementing it. Tech debt gets dealt with because it becomes a bottleneck for revenue growth when you can't charge clients to add functionality.