There is a guy who is a 5 (where I don't believe there is an enforced upgrade/point rule) who solos to a win almost every crit race in the 4/5s. He has won like three 5 race series in a row. He outwardly said (in spanish) that he didn't want to upgrade b/c he like winning the money in cat 4/5 races. That's actually kind of pathetic, since the money is certainly not much.
I don't think [edit: forcing someone to upgrade] the upgrading from 3-2-1 is as big of a deal as the 5-4-3 though. Cat 5 and 4, most of them are waiting to get out of there and many are new to racing. I could see it being a little frustrating to be competing against guys who should be at least 3s every weekend. Remember that part of being able to better yourself is being able to commit the time to training, which some folks just can't do, so for a guy to sandbag it pretty lame and dispicable in Cat4/5 races.
Also, quite a few races down here are run P123 so it doesn't really matter what cat you are amongst those, except for seperate scoring, but in my mind I'm not excited to be the 20th guy to finish but I got 4th in Cat 3!
Personally, I got my points and I upgraded to 3s halfway through the season this year. Sure, Cat 3 and p123 races (which have been all my races since I upgraded) are more challenging and I'll have to work/train harder/smarter to get back on the podium, but I like the challenge. Travelling all over the state to what for a field sprint or to race for 35 minutes would get old pretty quickly for me. Give my the 65+ mile RRs and the 70 minute crits. At least I feel like I was in a race afterwards!