That's the first time I've heard this one...
I tried to e-upgrade my flight SFO-YVR for next week online and was met with a message that stated that the Exec cabin was not available on this flight. It's an E90 and there is an Exec cabin...so I called in.
The agent tells me that not only is there no upgrade space, "yield management had decided there will be no upgrading on this flight". I replied that even with R=0, you can still waitlist...she said No, there won't be any upgrading
Oh well...it's a short flight and I'll check again when I OLCI. It looks like the back may be oversold but I have never encountered a situation where they won't take a waitlist...