It doesn't seem like more of a burn than leaving them in a position where they are regularly breaking things. Refusing to either move them into a position where they are more effective (read: less damaging) or provide the necessary training is worse than making up a new sidelined position -- it shows paralysis, inaction, and it's compounded by the negative effect such an employee has on his peers and subordinates (if he has any subordinates). Inaction on that matter can be crippling and reflects cowardice at the top.
The moved person cannot be compelled to accept the position if they don't like it. Move them out of the way, or if they insist, fire them (and this has happened to me -- I wasn't upset that they were trying to sideline me as much as I was that they were not straightforward enough for me to understand the nature of our disagreement until after the arrangement had already fallen apart (for the record, I didn't accept the sideline position)). Most likely the employee would accept the new position and start to look for employment external to the company if he/she was displeased with it.
The moved person cannot be compelled to accept the position if they don't like it. Move them out of the way, or if they insist, fire them (and this has happened to me -- I wasn't upset that they were trying to sideline me as much as I was that they were not straightforward enough for me to understand the nature of our disagreement until after the arrangement had already fallen apart (for the record, I didn't accept the sideline position)). Most likely the employee would accept the new position and start to look for employment external to the company if he/she was displeased with it.