I've declined an upgrade a few times, actually. It's fun!
I always enjoy getting to see the next person on the list called up, knowing the great joy they had getting the last spot(s).
Two times in the past year I have declined when I was already seated. Both times I was with my wife / family and got the last spot. Both times I just gave it to the person who was the last to clear the stand-by list. That's fun, too. When they walk back to take your seat in Y, and you tell them to head up to F instead.