This is absolutely normal for an upgrade using Avios. You are responsible for the difference in taxes, fees and charges - which on an ex-UK booking are actually quite reasonable despite coming to £230 one way / £460 for a return. If you want a laugh, try pricing up a JFK - LHR return instead. The difference in TFCs where you upgrade both ways is $1000.

The carrier-imposed charge (YQ) does vary depending on the cabin, as does the APD. So you will pay more YQ in Club World than in World Traveller Plus. I am not sure why there's a disparity between the Carrier Imposed Charge when booking with cash and Avios. I am wondering if the cash fare is a DIF (Dual-Inventory Fare) whereas the Avios fare isn't and that explains the disparity.