I find it absolutely impossible to believe that the activity described (cancelling a BF booking immediately prior to check-in) was happening in any significant amount. I think this is a case of an overzealous bean-counter gone wild. If this were such a significant practice, then every other airline would have already cracked down - and no other has. (And wouldn't Super-Duper-Pooper-Scooper or whatever it's called have caught this activity?)

As for the complaints about upgrades occupying agent time, there is a solution: A transparent system with clear, easy-to-understand rules would eliminate the vast majority of debates. Even better, Delta-style monitors showing wait-list order and status would eliminate a huge number of inquiries as well as disputes.

The answer to building customer loyalty and a much-desired yield premium is to give better service, not to reduce it. [/soap-box]