I don't know the answers, but factors seem to suggest that it is only about additional income.
Consider why NCL has the upgrade process is done by a third party. Obviously, there is a way to do this in house by NCL if the goal was to reward the latitudes or people who paid a lot for the cabin, etc.
It would make sense in a business model to have an intermediary in the upgrade process so that NCL can have clean hands when it comes to those clients who didn't get an upgrade.
As for the wheel that determines the strength of the bid: I would guess that more people are enticed to spend more with that pretty little wheel. While I don't think that the "poor fair good" is accurate about the chances of winning, it has still affected my bidding. I think that pretty little wheel has caused people like me to raise their bids from poor to fair or fair to good.
If that wheel didn't up revenue, it would not exist.
From what I've read, the max bid situation seems to be the Haven cabins, which seem to work differently because of supply and demand. Preventing people from bidding higher may create excitement and a more profitable live bidding situation for scarce cabins- I haven't read that there is live bidding on general Balcony or Oceanview cabins