Presumably BA (if it was JNB-LHR) and they refused to open up a seat for you? I can understand them saying "sorry, we're not taking any more of those L class people on that flight" but refusing to open up a seat for a passenger with a paid business ticket who is willing to sit in economy is still, to me, a ludicrous way to run a business.
I understand the notion that you have to have availability in the designated booking class but refusing to make that class available to a passenger who has paid for a ticket in a premium cabin just strikes me as a bizarre way to run a business. It would be like going to Hertz, having reserved (and paid for) a Mercedes, only to find they don't have one - and they refuse to give you the Ford Fiesta that's sitting there available. Bizarre.
But for the airline that Y seat may bring in more revenue than the discounted business ticket especially on the non-long haul segments that account for most of the revenue on a rtw fare. If the passenger that wants to downgrade is holding a ticket that is not discounted or restricted then I agree with you but in other situations the decision to not allow a downgrade when the conditions of the restricted ticket are not met may make economic sense to the airline.