I can understand the thought of not having 100% guaranteed availability as they do need to sell J revenue tickets as well, but I think somewhere in the middle works. For example, applying for an upgrade 6+ months out with J9...there shouldn't be any problem clearing this instantly.
I also get the frustration of not clearing every upgrade request. I've said it before but IMO there are just too many vouchers and too many Avios to be used. We are talking tens of thousands of long haul upgrade vouchers every year plus all the billions of Avios in circulation.
Finnair guarantees a minimum of 2 business awards for every flight but for example for the end of this year they have pretty much all already been taken for long haul flights. There is so much demand. Every flight is J9 but if you don't restrict award space soon you have nothing to sell closer to departure. And that's not a very good business decision either.
And don't get me wrong, I hate the waitlists. Trying to plan a holiday to SIN for next November there is not a single day with U1. But I honestly don't know what would be a better solution. J0 months before a flight is not good for the customer either.