This one is pretty straightforward, actually.

If you have not been upgraded and you're an Elite (any level), and there is a seat available during checkin, it's yours.

When your wife checked in, there was 1 seat (R1), she got it. When you checked in, it was now R0, you were placed on the standby list.

Your wife could've been silver and still beaten you out.

Usually this isn't much of an issue since they run EUA after dumping a mass of seats. This usually only happens one or two at a time when people switch flights.