The seats could be inoperative, and there were no non-revs to fill them up.

This happened to me on a 787-10, on its first revenue service flight, no less. The door was closed with 3 open business class seats. After talking to the purser during the flight, she said that 3 open seats in Polaris business had inoperative screens, hence why the gate agent did not process the upgrade. Not to say that's a good reason for not processing the upgrade, since streaming entertainment was available, but there's a reason behind it.