I agree on the upgrade system. If suddenly all the precious (and quite expensive) c-store ships became obsolete, all hell would break lose. And think of all the people who wanted their favourite ship at max level. The cycle would begin anew...and...and... instead of T5 Connie threads there would be... T6 Connie threads.
I'm a strong advocate of ship upgrade. FROM Tier 1 to top tier, whichever it is.
But I cannot help but wonder how many people that are so content with their Sovvies and Excels will join the ranks of the T6 Connie mob when their precious ships no longer are the top dogs any more.
One of the most repeated arguments against allowing lower tier ships to be upgraded is "a connie cannot and should not win against a sovvie". That is one of the most un-Trek concepts I have stumbled around in here. In almost ALL episodes in ALL Star Trek series, from TOS to ENT, the "starring ship" is the underdog weapons-wise, either outgunned or outnumbered (or both!), and it was the brains of the man/woman sitting in the captain's chair that made the difference.
Of course, in STO, the devs can give you the weapons, but not the brains.