It's not even because all management is bad (I'm skeptical of management, but not necessarily a "flat hierarchy" guy). But this move here sounds like homogenization of development. Having managers that need to manage a dozen projects at once will mean that development will fall into one style. Having all your IC's potentially needing to be shuffled around in projects both ruins team cohesion (because you're not focused on one project) and drives the design to be towards specific types of games. Ditto for directors on projects.

I won't say it's an unprofitable means of management, but it sure is a way to suck all the creative juices out of the room. Because you're spending more time appeasing a committee who wants to feel like they are "doing something" than finding the fun. And then kicked out when the project is done, because a revolving door is more profitable than fostering a team who's proven they can ship a success.

This can be an uncharitable interpretation of that statement. But that's simply a foregone conclusion when you have a 13 year long track record of decisions that end up harming creatives at the end of the day.