This is an example of why there is both vanilla and chocolate ice cream. I find upgrade to be a useful tag. There is a particular subset of issues and questions that deal with upgrading anything that is different from the issues related to, say, using the features. So Also, the distinction is a useful categorization.
The people with first-hand experience and expertise with using features are not necessarily the same as for upgrades. The tag helps to attract the right people to the question to get the best answers.
Members may have a particular interest in questions about upgrades or a desire not to deal with questions on this subject. So it serves to help readers select which questions to spend their time on reading.
If someone finds the tag not particularly useful, they should simply not use it. Its presence in the tag list does not detract from the list's usefulness for those people.
The issue Excellll raises is that the upgrade tag is not specific enough. The solution to that is not to eliminate it, which makes the question even less specific, but to make it more specific. I would agree that it should not be used as the only tag, it should be used exclusively in combination with a subject matter tag. Handle that by either replacing the stand-alone tag with combination tags or include hint information advising the poster to mate it with the appropriate subject tag.
As far as the tags including issues related to the upgrade process as well as problems during or following an upgrade, I see that as appropriate for an upgrade tag. That's what I would expect to find covered by such a tag.