I think in a larger merger both NWA and CO elites would lose their unliimited upgrades. There would be less necessity for them, as it is unlikely the main competition ( the UA/USA merged airline) would offer unlimited upgrades.

I think much else would be lost as well.. including quality of service. This may well be a case where bigger is not better. Airlines that are not doing a great job at present in getting their pax from one point to another in relative comfort and not likely to do a lot better with 50% more pax. Nor will they have as much incentive if just one of them controls over 25% of the market.