My personal view would be they can compliment each other.
Firstly, while the Project Manager is project objective focused (the big picture), the Scrum Master is value (the current release) focused.
The difference in my view is:
The Project Manager is a facilitator and enabler of possible many Scrum Masters.
The Project Manager owns the project and is often the vocal point for the communication distribution to stakeholders who are not embedded with the team.
The Project Manager must also take a whole of project view in relation to scope, time, budget, quality and risk.
I 100% agree, that a Project Manager is not a Scrum Master, but keep in mind you can have a Scrum of Scrums ... just like you can have a Programme Manager and Project Managers, each have a key roles as projects scale up.
Please feel free to point me in the right direction if am missing the target here.
Just my 2 cents ...