It may be industry standard at 121 airlines, but it clearly isn't in the rest of the industry and there are good valid reasons for both.
There is no valid reason for upgrading outside of seniority. If it's normal for small companies to ignore seniority, then the industry needs to do a better job of expressing this to new pilots. Back in 2008 when I was pursuing an aviation career, I was reading all the aviation forums, and it was not obvious to me that it was normal for
any company to upgrade arbitrarily. Since my aviation career is now over, I'd like my "legacy" to be that no new pilots are mislead like I was into believing seniority is enough to get you an upgrade, when it won't at all.
Seniority says Pilot C, but clearly D is the more qualified to be CA of a GV crossing oceans.
"Clearly"? I beg to differ. If both pilots can handle that situation, then they both are equally qualified, and the job should go to the one with more seniority. The difference between flying domestic and international is the paperwork, which anyone can learn quickly.
In my opinion, once you have around 1000 hours, you're just as capable as any other pilot with more than 1000 hours. Its like a 16 year old who just got their license a month ago is probably not as good as a driver with 10 years experience. On the other hand, a driver with 20 years experience is not necessarily twice as good of a driver as someone with only 10 years driving experience. There is a plateau somewhere around 1000 hours for pilots.