I got moved up on BA once (LHR-KWI) because my IFE was broken. The FA was so paranoid about negative reactions from other passengers that he made me give him my credit card so that he could pretend to be charging me to "upgrade". He even gave me a fake receipt
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This experience makes me think that the OP's reaction isn't atypical.
Assuming the excuse was valid, AA would probably have been better off doing this silently with boarding pass reissues before boarding.