I think the phantom bookings idea is a bit ridiculous. There may be a few people trying to game the system, but it can't be that significant on any one flight. With the current system, what's to stop someone from making 20 phantom bookings a few months out, and then cancelling them 7 days prior? Your upgrade would surely clear pre-72 hours then, no?

My gut feeling is that they sell a lot of BF tickets within 72 hours of departure to business travellers. They don't want people paying $1,000 + miles when they would otherwise be willing to fork over $8,000, so they don't allow the former to happen.

Otherwise, if someone went to their employer (who pays for J travel) and said "Hey, the ticket is $8,000. If I fly coach and use my miles, how about we split the difference?" I know some companies allow this, and the employer and the employee would both win. The only loser would be the airline.