Given the drastic difference between WP7 and WP8, personally I can give them a pass for not making current devices upgradable. We are really gaining a lot of good and powerful features with WP8 compared to WP7.
I think the biggest problem though is not that current WP devices can't get upgraded to WP8, but that future apps will no longer be compatible with WP7.8 devices. Although I guess from a dev point of view it will be a while before there are more WP8 devices than WP7.8 devices. But it could very well be that one year from now, very few new apps will work with current gen devices.