Upgrades would be nice, but there is really no reason for DVC to upgrade anyone. Hotels (Marriott, for example) give upgrades because they are competing for your business with other hotels. That’s why hotels have tiered loyalty programs, so the more you stay at a particular hotel chain the more benefits (including upgrades) you get.
DVC, on the other hand, already has your money. Owners are locked in for their future stays. To go even further, not upgrading people could entice those owners to buy more points. For example, if someone only owns enough points for studio stays but really would prefer 1BR stays then that owner stands a higher chance of buying more points. However, if that owner is occasionally upgraded to 1BR stays (or even different views) then the owner may elect to not purchase more points and instead hold out for upgrades.
It doesn’t make DVC bad because they don’t upgrade often. It makes sense.