He is saying the latter. $65 per 500 miles is the standard "Premium Seating Offer" the pops up every so often when one buys a flight.
I just got a "Premium Seating Offer" to pay an additional $569.00 to upgrade BWI-DEN. That's $190 per 500 miles!

A 4-pack of e500s is only $200.00. Confirming an upgrade isn't worth THAT much to me.