I know I'm in the minority but I feel that upgrades for award travel should have the absolute lowest priority. First of all, any medallion on a paid fare should be upgraded first. If there are seats available for purchase then those passengers should be accomodated. If there are any seats left then the award tickets should be upgraded. Delta gives away miles left and right. If we could only earn miles through BIS I may have had different feelings. I don't travel on award tickets. I use my miles on other people and if I feel like putting them in the first class cabin then I will give over the extra miles.
Right now the award upgrades is a VERY generous perk from Delta. I think it's horrible upgrading someone on an award ticket when there are PM, GM, SM's traveling on B fares. At the very least award tickets should not be upgraded until at the departure gate.