As stated in the comments, yes, they are common outside of universities. Big for-profit research shops (e.g., Lockheed, Raytheon) also have them. It's actually more cost effective to pay technical writers than to have the well-paid scientists spending their limited time on this. Similarly, such companies typically have also an "art department" just for the graphics in proposals and reports -- system diagrams, logos, etc. (separate from whatever CAD software they use for technical drawings).
I've never worked with either of these myself, but my understanding is that the PI is still responsible for the proposal and everything in it -- they generate the ideas, approach, etc. -- the technical writer is just translating the ideas into proposal form (and wrangling with Microsoft Word -- not all funding agencies accept LaTeX!).