That's what it sounds like. Everything else worked "as designed" except for the transfer from the upgrade
waitlist (which always expires at T-24) to the upgrade
standby list. I believe that transfer is supposed to be automatic for mileage upgrades, though it's relatively recent and maybe they're still working out the kinks. But even if the transfer wasn't automatic at check-in, the original poster should have been able to request placement on the standby list at the airport. However, it actually sounds like s/he did not request this as first class was already full ("I decided not to try to pursue it further"). That was potentially a mistake, because OP would have gone toward the top of the standby list, and if there were no-shows/misconnects/cancellations there could have been a good chance of the upgrade.
WillFlyer -- I would send a private message to
CO Insider here with your reservation details and a brief explanation of what happened. He and his team should be able to figure out why you were not automatically added to the upgrade standby list at check-in. It's possible that the fact that you were crediting mileage to a non-OnePass program threw the system off.
Originally Posted by WillFlyer
11. On the layover at IAH, I asked an agent at the President's Club for her ideas on what happened. She asserted that if one tries to upgrade with miles and the upgrade doesn't clear 24 hours before departure, that you're taken off the upgrade list and that the any remaining first-class seats are given to Elites. Surely that can't be true, but I thanked her politely.
It's "sort of" true. All waitlists expire 24 hours prior to departure. That's outlined in the
Overview of Mileage Upgrade Policies on CO's website. I believe it's a function of the GDS -- revenue waitlists also expire at the 24h mark. And then you get added to the upgrade standby list, but that list does not get processed until shortly before departure by the gate agent. Mileage upgrades are given higher priority on the upgrade standby list than free elite upgrades (although mileage upgrades would be prioritized by elite status too).
However, the "wrinkle" is that between the 24 hour mark and "shortly before departure" CO's Elite Upgrade Automation system may continue to run, and it will process free elite upgrades if inventory is released by revenue management in that timeframe. It's not completely logical that free elite upgrades can usurp mileage upgrade requests during this window, but that's the way the system works. Certainly as a non-elite, you have no inherent priority claim to a mileage upgrade over a free elite upgrade.