I agree with you that the wording on the certificate reads as though you can confirm upgrades on Lufthansa, but unfortunately the wording could be clearer. United is not the best when it comes to terms and conditions.
Originally Posted by EdinDC
Valid booking classes in Region 1 - CDYBEMUHQVWSTKL
Valid booking classes in Region 2 - CDVBEMHUHQVW
Certificate is transferable however void if bought or sold.
Those booking classes are for United metal only, not Lufthansa. If you check the very first post on this topic you'll notice that Lufthansa will not accept United SWUs to upgrade on the following classes:
Originally Posted by Kiwi Flyer
Valid in all booking classes except when booked in LH booking classes X, I, O, R, N, W and E.
Since you state your booking class for Lufthansa is W, then Lufthansa can deny you using the SWUs.
Have you tried buying up to the first available upgradeable class? Admittedly, you would still be on standby at the gate, but if you choose traditionally light flights you may be in luck. I've upgraded three of us twice using this strategy.
The other alternative is to rebook on United metal in one of the booking classes you mention above.
I feel your pain, but Lufthansa are well within their rights to deny you the upgrade based on your booking class.