If you were GS, maybe they would care, but still won't do anything about it.

Interesting theory. Does anyone have the actual numbers on this?

Which competitor exactly do you think has a better loyalty program than United?

For me, the instrument upgrades have become a way to upgrade other family members, not me. You can still get pretty good value out of them if you drop the expectation that they can be used on flights chock full of business travelers. I used 10 GPU's this year for trans pacific crossing from ORD to China and Hong Kong... all for family members, and all on flights that left on either a Tuesday or a Wednesday. I planned the trip to begin and end midweek specifically to target the GPU's to days when they had a chance to clear. If you try to clear multiple GPU's on friday-sunday on those flights it's just not gonna work most weeks. I got five of them to clear on the same flight outbound (a Tuesday), and 3 on one flight and 2 on another on the return. RPU's are being used exclusively for in-laws who are elderly and have some health problems, but are flexible about when to fly. I only book flights with R inventory (usually ORD to West Coast) and then immediately clear the upgrades. They have some value when used this way, but the old days of using them on a wider range of flights appear to be gone.

While the OP stressed one side of the story, I believe as 1Ks or 1Ps we all have the experience to purchase a last minute Y (or B E U M) fare and wish a couple of F/C seats were not given out yet. I do not blaim UA for saving them for the last minute. At least now the GAs are being directed by the computer system instead of making their own judgment, which makes me trust the upgrade system fairness a little more.

UA's strategy and approach for its FFs has been less than clear. Will it be more obvious in 2013?

Here is a link to what they worked on in 2012, such as prototyping a non-frequent flyer DB:
http://www.slideshare.net/vivastream/311324