William,
Here is where I see a potential problem with the kiosk providing honest upgrades:
What happens when a room is available (in the sense that it is for sale on spg.com and other outlets) but it is technically "not ready" due to housecleaning not reporting it as ready for a new guest.
Having experienced just this sort of scam at a Starwood property last month, I imagine the kiosk would make it even easier - "No junior suites available . . .check the kiosk if you don't believe me."
I can imagine some hotels will start a policy of having Housekeeping never return suites to official inventory, instead having some sort of backchannel method of indicating the room is available.
Will the kiosk be able to give info about rooms available pending a delay for housekeeping to clean the room?