Exactly.

The current reciprocal upgrade regime with NWA poses little threat, because the two airlines have very different network strengths and major markets, meaning that there's little chance of NWA stealing a significant number of CO Elites (and vice versa). Delta and CO, OTOH, heavily overlap in the East (and will step on each others' toes even more with the development of the DL JFK hub) - removing a significant disincentive to stick to CO will almost certainly result in some revenue defection to Delta (esp. from NYC-based FFers).

Now, I don't doubt that CO is working towards the technical ability to process upgrades on Delta (perhaps to allow reciprocal mileage upgrades, for instance). But the JFK hub development and DL internatinoal buildup are definitiely causing some hard re-thinking of CO's relationship with Delta.