There is no doubt that, given the scenario presented by JoanH, she IS the better customer. And there are indeed many people who, for one reason or another, buy full fare tickets almost all the time. Many of you act as though this never happens, but in fact it does and in many markets there are not discounted no-advance-purchase/no-Saturday-night-stay fares. As a Platinum flyer, I don't begrudge her the fact that she is the better customer.
The only beef I have with the no-L-fare upgrade policy is that they didn't include some mechanism where if all Medallion members flying on non-L fares have been accommodated with upgrades and yet first class seats are still available, then Platinums (and other Medallions) could be upgraded at the gate just prior to flight departure. I think this is only reasonable. As it is, you have non-revenue airline employees getting upgraded while some Platinum flyer who happens to be on an L fare sits in the back, even though his/her last ten flights may have been full Y fare, or international C fare. This doesn't make sense -- that you would categorically exclude someone who flies 100,000 miles a year on your airline from a space-available upgrade.