Realistic solution for the (lack of) WP8 upgrade: Trade-in program
Windows Mobile 6 was the effort of a complacent company.
Windows Phone 7 was the stopgap effort for a company blindsided by iOS and Android, that wasted time and resources of the Kin and the Danger acquisition.
If Windows Phone 8 is a radical departure that brings actual innovation at the price of breaking backwards compatibility, then so be it.
But as an underdog, Microsoft needs to earn as much goodwill as possible from the larger tech community, while making sure to not burn bridges with the small group of WP7 early adopters.
Microsoft should offer an amnesty program for anyone with a Windows smartphone (WM5/6 or WP7) to trade in their device for an upgrade discount / rebate to Windows Phone 8.
As we've seen with Android, your new phone is never guaranteed an update. That's the price of early adoption and a volatile smartphone market.
Regardless, Microsoft needs to do something to put out the flames on this story before it kills any goodwill the Lumia brings to Windows Phone.