It's unworthy of a modern day app, especially a non-third-party app.
It's especially unfortunate that this upgrade is bundled with a larger OS upgrade. Likewise that a proprietary format was used for the data.
This falls short of the integrated experience and "just works" attitude that Apple prizes itself on.
Backward compatibility has never been a strength of Apple's. Floppy, Classic, PowerPC, and recently optical discs have fallen to the wayside.
The data is not deleted. That's significant especially in principle.
This has little to do with other policies of Apple, such as their "control the user experience" attitude. Nothing about their policy prohibits handling this better.