There's definitely something weird going on with "upgrade denied".
A couple weeks ago, I got that message. I called, and was told a) the waitlist was full, and b) I had higher status than anyone else who was on it. Time passes, I keep checking - same message from united.com. I get to the airport and discover I'm op-upped.
I wonder if the new co-pay is causing problems. I've seen people refuse to pay the co-pay after they have cleared. Maybe the lists are being flooded by people who don't understand this will cost them money.