This may have veered away from what original article was proposing, so I may be muddling the conversation here a bit.. but I definitely believe we can build a company that has a strong "promote from within" culture, that provides a very supporting environment that helps people grow, and provides a career path for technical people that doesn't require them to move into management in order to advance their careers.

It's not economical to promote and pay more just for the sake of promotion.

But you don't do it just for the sake of promotion... you do it to keep a person's compensation in line with the value they create and to stay competitive with the market. As people gain new knowledge and skills, and gain experience, they become more valuable.