The original "rule" was that you had to buy a minimum of a K fare to get upgraded, but there was no capacity control on the upgrades. Buy the K fare, have the right status, and you were upgraded right away (no waiting for an upgrade window). I remember buying a K fare to HNL for around $450 during a fare sale and upgrading it.

Anything below K was not upgradeable. At one point, that meant L, but as you note, there were more and more sub-K discount fares added over the years: L, U, T, X, V come to mind.

The problem for DL from a competitive standpoint back in the day was that other carriers would allow upgrades from any fare (although I don't think it was at the time of booking) and there was pressure on DL to liberalize the upgrade policy. So, we eventually migrated to the all-fare-eligible model, but it was with time windows and upgrade inventory restrictions. It was actually much nicer when you could buy the more expensive K fare and upgrade on the spot.