Casual travellers won't know anyway, and book whatever is cheapest.
And it does imply that a SEN/HON/FTL from the higher buckets would be upgraded first still, so it may cause the frequent flyers to take that into account when booking, and so might, in fact, generate more revenue.
Frankly speaking though, while op-ups are nice (and have happened to me a few times over the years), if I can't stand flying Y (and I can't, really, but that's a different story), I book biz, or expend the miles to upgrade.
Booking the cheapest available fares and expecting the be op-uped first is, honestly, a bit arrogant; regardless of status.