I'd say this:

1) There are no guarantees that upgrades are available, and buying WT+ seats and banking on CW availability appearing is extremely risky.

2) Yes there were business class seats available but BA choose to not allow mileage upgrades at the airport. It helps to avoid devaluing the product by allowing people to upgrade as and when seats are free. On the flip side of this, lack of availability doesn't mean it is gone forever. Some award availability may be released close to the date of departure...indeed as the BA rep said it is tough luck.

3) The $1500 extra you paid wasn't wasted. WT+ is a completely separate product from WT.

In short, you weren't fleeced, it just seems like it. Business Class seats being available is quite different from Business Class award seats being available.

5) Welcome to Flyertalk