I don't think $1000 is generous at all, and, if the story as related by BA Loyal is accurate (no advance warning by CX, customers at airport 2 hrs before flight), CX's actions seem totally unacceptable to me.

CX should offer the difference in full fare, which is about $2000. Calculating the difference of a OWE fare is absurd: that same reasoning would say that CX should pay $0 if they double-downgrade an award ticket from F to Y.

CX should have handled this the way other airlines (esp US lines) handle oversells. Come up with an offer for anyone in F to downgrade, and keep increasing the offer until it's sweet enough for someone to take it.