I am one that will upgrade way beyond the value of the bike. I still have an 89 Epic that rocks a full Ultegra group and set of Helium wheels. The wheels cost more than the bike did new. So I say upgrade.
I would save a little a more cash and look at the Sram Rival group. This is selling in the $800 range. Once you get the new group then you can move it to a new frame.