Very well stated.
Particularly the point on having a limited amount available for confirmed upgrades then the rest will be down to the lottery as is now.
This is not rocket science.
It's called U class inventory and they already use it to capacity control confirmed upgrades/award seats on domestic, and they use to do the same internationally.
They still capacity control the award seats.
AND - they are now introducing a hybrid system for domestic.
They should:
1/ Allow confirmed upgrades on International in advance (capacity controlled).
2/ Have the lottery system as a backup for upgrade requests that are unsuccessful at time of request.
3/ Allow ALL booking classes to upgrade.
In other words - International system should be the same as the new domestic system. (ok - for the experts - without ODUs.... But otherwise the same).
Alternatively, you could restrict red e-deals (who can't currently upgrade int. ) to the lottery only, but higher classes can confirm with points at booking if U class available.
4/ As I have suggested previously - QF should provide x number of comp. upgrades for Platinum members as a status benefit - capacity controlled - like the NZ model.
Then you have a near perfect blend of revenue protection, good yield management, loyalty reward, and viable options for points redemption (also known as reducing QF's points liability).