@starrynight - I generally agree with you that a manager should have experience. However I think sometimes it can be good to hire someone from "outside." Often the new person will have fresh new ideas that can implemented to everyones benefit.
I was in a situation similar to what you're describing. A fresh college grad was hired to manage a team that had been working in the industry for quite awhile. However, instead of coming in like he knew everything the the new manager got a lot of input from the team. He was able to combine his knowledge with that of the existing employees and the business ended up doing better than ever before.