I believe these 4 categories are in the correct position. However, it sounds like you are speaking about a lack of harmonization between all the categories.I think it is very important that there is harmonization between all the 4 categories. If a company is executing on projects that don't fit in with its overall strategy then there are serious problems that need to be addressed. I believe that clear communication and transparency will ensure that these categories are aligned, because it will ensure that people of all levels in the company, from executives down to the project team members, will all be working toward the same goal.

I think that the four categories are in order. I look at it as the strategy and tactics that come from upper management are the idea or planning phase. Thinking of what you want or need would be the strategy and then how are you going to get it would be your tactics. The actual action to achieve what you want would be the programs and project. This is how most things get done so I think that the issues that come up in your example comes from who is doing the thinking and who is doing the work. A possible solution would be to have a project or program member advocate present when these upper management tactics are being selected to provide the point of view that upper management doesn't have.

I agree with @srg36 and @cdj24 that the four categories are in order. Upper management is responsible for developing the strategic plan and how it can be executed. I agree that it can be frustrating for upper management to make these decisions without having input from the Project/Portfolio managers who will end up doing the work, but the reality is, especially for large companies with over 5,000 employees, upper management isn't looking for more perspectives or input Portfolio/Program/Project managers at that stage. Upper management is focused on creating a strategic plan/direction for the company and expects the Portfolio/Program/Project managers to achieve the strategic goals. As noted in Dr. Simon's lecture and PMBOK reading managing a project includes; identifying requirements, making clear and doable objectives, addressing the various needs/concerns/expectations of the stakeholders as the project is panned and carried out, and balancing demands for time, cost, quality, and scope. As @cdj24 mentions a solution would be to have a project/program manager present at the upper management meetings, but again I think that would only really be feasible for a small company, because large companies have many portfolios and many project members and would not be able to invite all of their comments/opinions when making high-level strategic decisions.

I think we can all agree that all those responsible for a project, ranging from the upper management all the way down to "lowest level" employee needs to be on the same page requiring transparency and harmonization as previously mentioned. But this point does not actually address whether or not the hierarchy mentioned is in the correct order. In my opinion, the hierarchy is correct. Beginning with an idealistic view is not an issue at all. Keep in mind that even upper management has demands to meet and that is normally the voice of the customer. So while you are calling these requirements unrealistic, they are often well thought out by management to meet the demands of the customer. Despite this situation being what it is, if you look at the definition given to a project manager from the power point, you will see this lines up with a lot of the tasks you described your father having to perform. A project manager makes "clear and doable objectives" and is responsible for "balancing demands for time, cost, quality, and scope." This is exactly why project (and therefore project managers) are introduced at the end of this hierarchy. Unrealistic or not, project managers take what's been done in the strategy, tactic and program phases and refines it to create tangible results in the project phase.

Rjs84 is correct in that calling it idealism vs. realism is unfair to higher management. The way the hierarchy works is that those people are the ones who either supply ideas or problems that need to be fixed. Project Managers are those problem solvers as they are the people who know which people to put on what part of the project. Often, PMs are actually not technically skilled but rather, they are able to see the skills of others and put them into positions in which they are best able to accomplish the task.
Idealism is important in companies at some levels because without the drive to attain perfection, where would we be?