These threads are always polarizing. I think there are definitely points when dudes need to upgrade because they just outclass their category.
Here's a thought. If someone knows that realistically they can win any race they enter and feels this throughout the entire season then they should upgrade. This rule would apply to races that suit them as a rider, i.e. a sprinter should not be winning hill climbs and if he does, then an upgrade (or a drug test!) is definitely warranted.
The jump from 3 to 2 is huge and there are a lot of reasons to not want to do it. I know I just went through it. Ultimately I had more than enough points and couldn't resist the temptation to race with the big dogs and here in the front range of Colorado, big dogs is right on. I'm ready to get my ass kicked but **** at least I went all in and won't have regrets later in life. No 'what if's' for me.
At the end of the day this bike racing gig is all about challenging ourselves and if it's not then it's just an ego stroke. If you race just to have your ego fueled than you have bigger problems and people railing on you to upgrade should just forget and train harder to smash you.