I had a similar experience earlier this year on almost the same flight (SFO to Newark) on CO. I am platinum on CO and so I got the only upgrade. The plane was late taking off and even though they closed the door, after about 20 minutes, they opened it to let on the first class passenger who had finally showed up. They asked me to step off the plane and told me that he had shown up and that I would have to give up my seat. They offered me one upgrade for the future which if you are familiar with them, they are pretty useless because Continental does not release seats to F until pretty late and then you can use your elite status to upgrade anyway. I negotiated a $200 flight credit, one of the upgrades, and free drinks and headsets for me and my friend during that flight. I was not too unhappy because my friend had not gotten an upgrade and we had some things we had to do during the flight anyway.