I quit flying Airtran a few years back because of these very issues. I flew MDW to ATL on Airtran at least once a week prior to the merger with Southwest. It got to the point where the upgrade process became so frustrating I would dread walking to the counter just to leave empty handed. Once on board, BC would be occupied with the people I saw chatting with the gate agents prior to boarding. It appeared to me they were a combination of Airtran employees and friends of the gate agents that were getting complimentary upgrades while the Elites sat in coach. This happened in both Chicago and Atlanta. The constant feeling that I was getting screwed became too frustrating and I finally switched carriers.
Sounds like matters have gotten worse with the merger.