Unfortunate, but it sounds like the Wife had a J AP reservation only confirmed in economy. So it wasn't really an 'upgrade', but rather, she was waitlisted to travel in her ticketed class of service, J, as she was unable to obtain a confirmation in that space at the time of booking. The waitlist obviously was processed into confirmed space at the gate.
If AC were to start 'upgrading' all companions of J passengers, can you imagine the pandemonium that would break out? Travelling partners everywhere would book one ticket in (discount) J, the other in Y, demand to sit together (conveniently in J, of course!).
And if there are 15 empty seats, why not invite the SE's/Elites to fill them? That makes sense to me...(it really does).
The SE/E's could have forked out upgrade coupons, but obviously failed to do so if the plane was dispatched with 15 empties. Better to give those upgrades to anyone, heck, even students and kids, who will aspire to the J cabin someday, than SE/E's who know the drill on how to get into them and can allocate their resources accordingly.