In my company we do have predominantly "technical" leadership, as in almost everyone has an engineering background, but we still run into problems. For software folks that's mainly because leadership either tends to come from other non-software domains (EE and ME mostly), or it tends to be people who honestly weren't very good at the actual engineering side of things to begin with.
Yeah... I think you've hit the nail on the head. Technical is probably too broad of a description. It's never made sense to me the amount of people leading software development in some capacity that have never developed any software, let alone any within the domain they "lead".
