I had a very similar story with Lufthansa. LH sold us an itinerary last summer in J (within europe) with one flight operated by Brussels airlines... economy only. No lounge, no middle seat, only extra luggage was recognized. I asked LH for a downgrade compensation, they ignored me. I tool them to the german arbitration body and I got 290EUR for 3 people. That's essentially what you got. Very disappointing. More than a downgrade it felt like a ticketing fraud because they portrayed as business a non-business segment, only visible after purchase.