I have been upgraded as a friend of cabin crew at KLM. It was more or less a given from the start that - if there was space - I would be upgraded. I think this is common practice amongst a lot of airlines. If the upgrades are not caused because the flight is overbooked there is no reason for BA (or KL etc) to upgrade any passengers at all. In flight upgrades for friends, families or colleagues (if done discretely) do not bother me.
It would bother me if it impaired the service in the class they are upgraded to, but I always had Y food or the very last choice. I believe it is the same on BA.
AF's First class is almost exclusively occupied by staff & friends. Nobody buys that product.
I don't believe that if a flight is overbooked BA staff are upgraded before elite travelers or even full fare paying pax. If that was the case I would be fuming.