United always maintained the policy that you should be re-accommodated in the same class of service regardless of how you got there. This applied to "instrument" upgrades and paid premium cabin.

It's not crazy to say, "keep revenue seats available in premium cabins." But United is not saying, "screw the people who used upgrades." They're just giving priority to revenue premium passengers. I don't see this as totally off-the-wall.

I can say that I've only once been re-accommodated in economy on an instrument upgrade. But if I had persisted, I probably could have taken some sort of horrible routing and flown up front.

Although it may be written elsewhere, I wonder if status plays a role.

As far as "order of re-accommodation" goes, that's not new. It makes sense to use United metal preferentially, then Star Alliance, then other airline. I just had this happen with a cancellation. The choice was a double connection, staying in first class on United, or re-accommodation in economy on Delta. (Delta had no open seats in first). I kept the United flights, and it was fine.