Going SYD-MEL on an evening flight recently, there were dragons at the priority check-in desk queue, priority security queue, J lounge, and priority boarding queue at the gate. I nearly expected to see one guarding the loos!
I didn't see anyone turned back, but the check-in queue dragon was quite rude to me until I produced an appropriate status card. When I did and she realised her mistake, she then switched to overly polite. The other dragons were all friendly.
The result was the right one, I guess - all the queues were empty, despite the time of day. But IMHO there was a bit of a service trade-off to get there, as my main memory of the experience is the rude dragon. There's a difference between turning away people who shouldn't be there and being rude to everyone just in case, when most people do the right thing.