Oh, I agree. And it shows in the thread about "more reasonable price for SH J" too.

There is virtually nothing to be had in J that the tier member doesn't already have in Y. As you say, the paid J earns more points but that is about it.
The thing is, even if they offered the upgrades for 50 points, I wonder if people are going to think it is worths the hustle. You give up exit row for a meal - who will waste points on that?

Regarding the earnings: I don't think the points-according-to-original-class thing is dicisive. I think it is about Y is too good and J is not good enough:
a) tier member already have "everything" in Y
and
b) SH J in itself is nothing extra.

So for the upgrades to be more valuable you'd have to do a little of both, say:
a) remove free drink and free seat selection for tier member i Y
b) go with proper 2+2 J

If such changes were to happen, I bet the upgrades would instantaneously become more valuable!

I know no one thinks 2+2 J will ever exist in Europe, but it is not that uncommon in other parts of the world.