Revenue management is HARD. Most things that people are sure are obvious do not hold up in practice. For everyone who would pay the extra for an upgradable fare and is now getting a bargain, how many are there who would never pay for beyond T+ to upgrade, but will pay $25? If there are 30 $25s for each $700 they don't get, AC is ahead ($750 > 700) while you get a bargain. And that's ignoring the issue of "upgrade certs mean we sell less J seats". And who's to say, just because you are not upgrading on that flight, that no-one else is? Perhaps someone who won't buy Lat unless there is R space sees the R space you're not taking and up-buys. You can't just look at your own expenditure and generalize from that.

Me, I am glad there are lots of ways to get more comfortable and I don't try to understand the logic behind the prices. I just ask if I am ok paying or not. The fact there are those who would pay what I won't, or won't pay what I will, has to factor into AC's decisions, but not to mine.