The most generous interpretation I can give to this change is that they want to stop trading on the secondary market (understandable), but they also did not want to invest any resources in improving their paper based upgrade certificate system.

Of course, that doesn't really explain the proviso about specifying one's flight information, nor the "honoring at LH's discretion" language. I don't see how manually processing itinerary information for each cert would do anything but increase costs to both the airline and us. Which makes me think that this portends a gradual phase out of the LH upgrade benefit.