This happens quite often - I've had it happen to me at least 3 times that I know of. It is not just pilots who get this benefit - other flight attendants or friends of the cabin crew also get moved up to business after the door closes on flights in which "business is full" but the door closes with empty seats.
Search back a few years and you may find the thread about FL flight crews treating the business class seating area as the "crew personal transportation" section of the plane. One issue that has improved is the crew filling up the overhead bins in business with their own luggage. At least now they move their stuff back to be over row 10 and 11.
I've got mixed thoughts on this issue. Yeah, I'm an Airtran elite, and I sure do like the free upgrades, few and far between as they may be, and by FL policy, I'm entitled to the upgrade if there is an empty seat. But I figure I'm not flying nearly as much as the crew does. I'm not guaranteed an upgrade, and I'm not opposed to an employer providing their employees with a perk once in awhile. The problem is, it is not Airtran providing these crew members with an extra perk, it is the GA taking it upon themselves to circumvent policy, for which I don't have much tolerance.
One thing that would help me get over this easy would be if Airtran recognized Elites sitting in steerage (coach) and offered them an upgraded snack and/or free drink. I know that may be impossible as it might create more problems than it solves (although United FA's almost always recognized those in coach with status and frequently offered free drinks. Getting an upgrade "bumped" so a non-rev or FA friend can sit in the "empty" Business class seat bothers me most when I'm on a 3 hour flight, getting very hungry and know that if I were in Business I would at least be entitled to a snack and a free drink.