I am looking to travel to India (BLR) from USA (JFK). I see that the upgrade from Economy to Business in classes (O,T,N,Q) is 200,000 Avios for the round trip. The fare for this trip is about $1,200 RT.
Alternatively, I can book award travel between the same cities on Business class for 170,000 Avios. Why would anyone upgrade from (O,T,N,Q) to Business and pay extra Avios and pay extra money? Am I missing something here?
It's all about the fare buckets
O, T, Q, N are Economy Classic fares, which is the second cheapest ticket type. Typically, cheap = inflexible. Qatar offers one complimentary date or route change to this ticket. You're considering making two changes across four flights (including the stopover in DOH), neither of which involve a date or route change.
Effectively, an upgrade from that type of ticket will involve cancelling a largely inflexible Economy ticket and then issuing a new ticket in Business Class, so the airline expects you to pay for that privilege. Can you cancel the original Economy ticket yourself for a refund and rebook a new seat in Business Class? If the Economy ticket is non-refundable, the fact that you want to upgrade and effectively throw away your Economy ticket is the reason why you don't get a cash refund.
(It's possible, although I don't know, that Economy Comfort (H, B, Y) fares might not have this problem. Until recently on certain other Avios airlines, it wasn't ever possible to upgrade from Economy unless your original Economy fare was the most expensive type)
So "why would anyone upgrade from (O,T,N,Q) to Business and pay extra Avios and pay extra money?" They probably wouldn't unless they - unlike you - hadn't done their research and just took the price offered at face value. Perhaps enough people do.
Ref: https://www.qatarairways.com/tradeportal/en/NewFareFamilies.html
