Yes, domestic upgrades book into A inventory. I recently used a BXP1 to upgrade, re-checked the A inventory right after confirmation, and boom, it had gone down.
The BXP1 was worthless with 24 hour confirmation, but has value (except for EXP's) now that you can confirm 30 days prior. They're especially worthwhile for non-status pax, but a transcon is definitely the best use if you're gold/plat and comparing the upgrade value to the cost of stickers. For example, my upgrade was BOS/SFO on a "G" fare, $55 more than the lowest (N) I could have bought, and 6 stickers is $180 worth. I saved $125 cash, and guaranteed the upgrade, which as a Gold, who knows. Maybe J on a 767 would be better than F on a 757, but I'll be enjoying triple miles, so more than happy with what I'm getting.