Threeholer,
All of your last questions are valid and you seem to share the same opinion on PME and DL masters degrees that the rest of us do. The system should evolve from one that promotes based on box checking to one that both incorporates legitimate educational opportunities that are applicable to strategic thinking (and strats based on those), but importantly, also includes more emphasis on primary job excellence. The more I've discussed this overall issue in various settings the more I'm starting to believe the core of the problem is simple: the AF assumes everyone is excellent at their job and thus has to move to "secondary" factors to rack and stack folks. We all know this is false in two ways, A) there is often a wide spread (STS) between the guys who are sh*t how and the dudes who can't fly (or finance or contract or turn a wrench) their way out of a wet paper bag, and B) even if a guy is obviously bad at his job, his OPRs/PRF will often be compiled in a way to minimize that so not to have one of the Commander's guys "left behind."
There's not an easy fix to either of these problems (realizing not everyone is a winner and writing honest assessments), but to me the problems are at least becoming increasingly clear in my eyes. As OverTQ alluded to, no, the CC doesn't need to continually be the best pilot in the squadron and I'd much rather have him be good at Commander business rather than crew dog business, but the idea that a person can rise to the position of Commander without ever having been even decent at crew dog business is a foul on the entire system. I'd argue it is exceedingly rare where a person is a sh*tty pilot but would make an excellent commander of a flying squadron based on other "officership" type qualities, and even then that person would have a credibility problem leading troops in wartime. Being good, even excellent, at your current assigned duties at any level of responsibility should be an absolute requirement to move on to the next higher level, bottom line.
In the ideal system, if you suck at your job you don't get promoted; there's no amount of boxes you should be able to check (PME/MA/volunteer/d*ck sucking/execing/etc.) that should allow you to escape the fact that you can't flourish where you're planted. As your level of responsibility becomes more and more strategic and less and less tactical, your job follows suit so at a certain point if you can't move beyond A+B=C of the tactical world then you will not command or make strategic positions. At that point perhaps relevant, useful PME and Masters-level strategic study are factors that should influence the decision of whether to promote or not.
In today's system it seems to me and to a lot of other that those "strategic thinker/well rounded/MA-educated/officership" considerations are coming up when a dude is a f*cking lieutenant trying to plan ahead for getting on the right "vector" as a young captain so he can get a school slot on his first-look major's board. That's exactly the wrong time for those things to be important; it's the time when that guy should be fully immersed in the tactical mission of his unit, because his primary duties lie at that level. This is amplified even more when you're at war and the Boss is putting pink bodies in iron to go out and kill the enemy, because guess who is likely to be sitting in the seat? What skills do you want that guy to possess at that point in time?