I agree 100%.
I'm all for honesty with product. No need to be embarrassed about it - everyone knows what just happened and that life won't be the same for VA - but don't pretend, via advertising or seat pricing that there is a premium service on offer when its just not so.
Why don't VA just cancel their 'business' class product until they've got their collective cough together and can actually deliver?
Use the existing 737 J seating to upgrade status passengers but with Y amenities and conditions - just a nicer chair ... though even thats debatable on the 73H version of J ... at least you're at the pointy end though