True, and if the market economy was working as it should. Then if enough people were selling old digital music at lower prices, Itunes would have to lower their prices. Essentially what their doing is anti-competitive.
You could even imagine an automated system where you buy a song for some two cents and then sell it back after you're done listening to it for a one cent. You could have users make their collections available on a market place and pay them some fraction of the profits you make.
The ability to upgrade was only available for songs purchaseable as DRM-free on iTunes. I still have tracks in my library with the DRM because the distributor went out of business, making it impossible to upgrade.
On Linux nowadays, but last time I was on macOS with iTunes I has an album of Australian folk rock that still had DRM, were still an old bitrate, and not upgradeable to "Plus" (yes, the thing from 2007) or DRM-free.