I'm perplexed at how that would matter at all. There aren't "expensive" points and "cheap" points. If you paid an expensive price at a hotel, you received many more points.

Hotels offer rooms for points at certain rates. Sometimes they offer upgraded rooms on points, sometimes they don't. When they don't it's because they believe they will be able to sell the room at standard rates.

If you want to enter into an agreement for a room that they don't offer, it's a negotiation process. If you don't like the offer, don't accept it.

If you're saying you should be able to piece together offers from different rates - low points costs for the room, plus the low upgrade price for someone actually paying cash for the room, that's just not how it works.

Just the assumption that the property believes they can sell them. That's the business they're in. If closer to check-in the reservation rate is lower than expected, and rooms look like they won't be sold, and lowering pricing isn't an option/won't help, the property may then accept a lower marginal amount of revenue for upgrading an award to a better room. Or they may upgrade another guest. Or just leave it empty for market positioning.