runninaway, what you propose is exactly how the majority of programs function today. Let's take Continental as an example of a problem, since I happen to know this situation all too well.
No matter how many miles a credit card charger could earn with Continental, there are less than five weeks per year where it is possible to find a conveniently-timed award seat in F DTW-LAX outbound on Monday or returning on Friday. I don't want to spent twice the miles for guaranteed availability; that's actually devaluing the miles, not rewarding my spend loyalty at all.
Speaking only for myself, the bottom line is award availability, not upgrades. If I want to sit in F, I'll pay the extra miles. But I want to be able to do that when I please. Why bother giving an airline my credit card spend if the miles are unusable? Perhaps there needs to be a special type of elite level for high partner spenders, providing greater award availability and elminated award redemption and change fees only. All the other elite perks are of lesser value.