Unofrtunately the scenario played out as it was designed to. If the milesaver bucker never opened up, then being passed over by standard upgraders was correct.

It may seem like it sucks, but if you think about it, it is the right thing. Because theoretically, if they allowed milesaver awards to get the next available seat, a lot less upgrades would be available. There should be a set number of milesaver seats on a flight and that's it.