jao - you airline staff? if so when did you last have an st pax offloaded? Am ex crew and I have never seen it, upgraded yes, offloaded no
OH is staff. Not CC. Staff don't get on the plane at all if it's full, so offloading should not be an issue. It's done at check in.
A long time ago, 25 years at least, OH and I and two friends ( one of whom was also staff) plus 1 child each were actually sat on the plane, when 4 passengers turned up. As we were actually on board, the adults were offered jumpseats, 2 crew seats, 2 in the flight deck (and we were told, specifically, the Captain had given permission). Obviously the crew seats were stowed during the flight, so the guys spent the flight on their feet. I daresay had there been a seat in a higher class they would have got it, under those circumstances, but in 40 years of OH working for BA, that's the only time.
As for upgrades, the rule as I understand it is that you can be upgraded 1 step from your entitlement in order to get on, and again that would normally be done pre boarding. Whether that has changed in the new ST rules since April 09, not sure. The '1 up rule' may not apply at all anymore. We have made it into First on 3 occasions I think, when Club has been full. Each time done either at check in or at the gate, not on board, and the last time was a good few years ago, about 2000 I think.
Besides, not sure of your point, even if staff are upgraded, there's still an empty seat for them to be upgraded into, so still no extra cost to the airline. They don't offload fare paying passengers and keep staff on, that's for sure.