Rohan at Blessing of Kings had a good post recently on what happens when you start piling on extra rules onto a system until they start contradicting each other. In his example, the personal loot system--which was introduced to reduce social friction--got subverted by adding trading if you don't need the item anymore, as addons can be used to call others out to hand over their loot to folks who could use the upgrade.
A different example in WoW is the Protection Paladin's Avenger's Shield ability. The base variant of the spell is a multi-target holy damage that chains up to 3 enemies, and interrupts any spellcasts of the initial target. Now, the thing that's not mentioned in the tooltip is that this jump is a "smart" targeting system: it won't target enemies that have been CC'd at the time you cast the ability, which makes it an extremely effective AoE pulling tool for the Paladin.
In the Paladin's artifact weapon, one of the gold traits--Tyr's Enforcer--upgrades the power such that it explodes for damage within 5 yards upon every impact. This is a pretty awesome upgrade in a lot of cases, like extra DPS or snap threat on large groups. But it also suddenly makes Avenger's Shield useless for AoE pulling if you have to use CC. Like on Moroes in Karazahn.
The explosions work at cross purposes with the smart nature of the base ability, and for Moroes specifically I spent a lot of the fight cursing the upgrade because it also is my ranged interrupt. So in the Moroes fight I can't use it as an AoE pull and I can't use it as my ranged interrupt, because if I do, the explosions on impact will clear the CC on the other enemies. Basically, the upgrade rendered the original purposes of my ability moot, and turned it into primarily a DPS ability.
This is an example of adding complexity eventually reducing the situations that a tactic is useful in. Enough rules on the ability, and it makes it such that it's not really an upgrade anymore, but something that just alters the ability entirely, which suddenly makes me want to either have the ability to turn that upgrade on or off, or just be an entirely different ability, since the "upgrade" removed one of my tanking tools.
Then to add insult to injury, it's not smart enough to jump to enemies hit by my Blinding Light since that CC isn't affected by Holy damage, but that's a separate issue.
In Eon Altar, we actually had a slightly different scenario. In one case, an upgrade to an ability increased the range of the damage of the ability, both the minimum and the maximum. For an example, Rank 1 did 14 - 16 damage. Rank 2 did 13 - 18 damage. While the average damage went up, because many enemies at low levels had 14 health, the upgrade actually created situations where you'd sometimes not one-shot those enemies. So it became optimal to wait until you had enough resources to skip directly to Rank 3. To fix it, we just didn't decrease the lower bound, and that made the issue go away entirely.
Which is to say that when an upgrade isn't an actual upgrade and makes the ability worse in some situations, it feels bad as a player. If I, as a player, am performing what should be a direct upgrade--one that I don't really have a choice on, it's literally just direct progression--it should actually be an upgrade, or it should be obvious it's radically altering my ability. But losing tools feels bad, man.