"A side assumption, equally optimistic, is that managers have enough savvy to tell whether displaced employees have done a good job documenting the work they do, or are just having them on."
This is the real issue. As mentioned previously, the reason this all exists is short sighted CEO's ruining everything for gains to hit performance measures and/or bonuses.
I tried to explain this to someone once in the context of where I work and my job. Without trying to sound prideful, I know more, do more, and am capable of more than anyone in my organization at doing what I do. Now that is in the context of my small piece of the puzzle of our organization. That said, EVERYONE is replaceable, myself included. Would the new person coming is do a good a job? No. Would the business suffer as a result? Absolutely. It would probably take a sufficiently trained and educated individual, who has some experience doing what I do probably about at least 5 years of employment to get to a level where I've been for years. During that time period, things would go to hell.
However, you are assuming that management really cares. They do not. Not about the business, and not about you. There are exceptions, however generally speaking this seems more par for the course. Three things: One is that so long as management meets whatever performance measures they need to hit in order to fulfill whatever employment obligations they have the rest doesn't matter. If that involves getting rid of you and getting someone 20k cheaper to meet some quota their manger gave them, then so be it. Two is so long as they can get their bonus or or their measures they will use this to advance their own job somewhere else, the faster the better. Three is none of them are around in the management position long enough before moving on to the next to really see any of the negative repercussions of their decisions and how that affects business. By the time it does, they have handed that "portfolio" of problems off to another manager, and is now their boss, and what are they going to do, blame the guy farther up the food chain from them? Not a way to advance very far in management.
So while some people may think they're irreplaceable, they are making the incorrect assumption that management really gives a shit about the business or what will happen should you leave. About the only time this will come into play (likely after the fact), is if it PERSONALLY impacts them as a manager (i.e. their ass is on the line).
So I guess what I am saying is it really isn't so much if the managers have enough savvy, it is if they actually care at all. So long as they get paid, their advancement assured, most probably don't. Depressingly sad I know, but true. That said there are exceptions, however likely too few to really make any difference in the grand scheme of things.