Yes, as you say it's a good deal for both TG and the passenger who wants to upgrade. I wish more airlines did it like TG does. Even the catering costs are arguably not any higher because I think normally the meals are ordered and prepared well in advance of the plane's departure and in most cases a last minute standby upgrader won't generate the need for any extra meals. They always load extra meals, especially for business/first class and will just do with one less extra meal. So for TG their only cost is the extra mileage that you'll earn on the standby upgrade.