I have to post a differing opinion whenever this issue comes up. Arya, have you ever flown in CO BusinessFirst to Hawaii from the mainland US? How about on another carrier? If you had, you'd know what the joke is: what other carriers offer in their premium cabins on this route. All the rest (TWA excepted, but this will probably go away when it gets AA-ized) offer something on par with domestic First Class. Many even have special "Hawaii configuration" aircraft just to be able to offer domestic service on a wide-body.

However, CO offers the full "international" BF product on the HNL routes, with all the benefits: increased legroom, wide seat, better entertainment, food/beverage, lounge access, etc.

I think CO is doing exactly the right thing regarding service to HNL - they are providing service on par with their international BusinessFirst routes, and the upgrade policy matches. If you prefer domestic upgrade rules for HNL, there are plenty of other carriers willing to provide you with inferior service on that route.