I think it's fair. You are paying to upgrade below the actual market rate for the upgrade. Some mileage is better than none.

You can upgrade at the business class check in counter or at the ticketing desk or at the golden lounge for those last minute upgrades.

I was offered an upgrade at the business class check in desk in istanbul over the weekend from economy to business for RM2500 (i am a enrich gold traveller) and I thought about it and politely declined.

In hindsight, I should have taken it as I had a tough 10 hours with a guy in front of me who had his seat reclined all the way back the minute the seat belt signs were off after take off.