I guess it comes down to whether what you have to offer is something that people would pay for anyway if they knew they weren't going to get it for free. For airlines, given the financial state most of those that give FC cabin upgrades to are in, it might not be the most compelling argument of a sound business plan.

Again for hotels, I can certainly understand wanting to balance rewarding their most loyal guests and ensuring that they receive decent revenue for the benefits they're giving out. The bigger issue I have is where those benefits aren't clearly spelt out, but for the likes of Mark Hopkins at least they're open about their upgrade policy. I think we've all been in Club Lounges that are bursting at the seams at breakfast or in the evening, and if charging for access thins out those using it I'm all for it (and for me personally, I'd take a suite upgrade over club access any day anyway ).