I get that Delta is trying to protect the D1 "brand" I guess (not sure how good of a brand it is.. when I think D1, I think of the cramped 767 cabins since that is what I see most frequently), but I do feel like the lack of usable mileage upgrade instruments is annoying.
If the D1 cabin is wide-open, I don't think it would be unreasonable to offer DoD upgrades at a reasonable mileage redemption. Limit it to people with status - with a discount for higher status. Something on the order of 100K for FO, 90K for GM, 80K for PM, and 70K for DM or something like that.
That said, I realize most airlines have killed any semblance of mileage upgrades (those that allow it typically require Y or B fares) so this isn't unique to Delta.
The HND lounge complaint is valid in my opinion. Just seems cheap, especially for a DM with a Skyclub membership.