It's actually the other way around. If the flagship headphone had a different name each year because they made incremental improvements then a flagship from 2 years ago would be perceived to be completely "outdated" rather than variations on the theme. If something sounds fundamentally different then call it something different, like the LCD-X. The LCD-3F (which it does say on the box "Fazor Edition") is an incremental change on the older LCD-3, but it still sounds like an LCD-3. Better for them to be continuously pushing forward than not. I don't see how offering an upgrade program is a bad thing. Its actually reassuring knowing you can upgrade to the current version without losing all of your previous outlay.
My problem is that Fazor is not a very incremental change, from the graphs shown here it is changing things considerably, I haven't had a chance to listen to it for too long, I've heard it from an almost new pair. It was rather different sounding.
You don't have to call the incremental updates anything, but if you make something that's really is new, don't add it to the current line up. Perhaps you're right about the addition of the option to get an "upgrade" but that's only when you give this new addition in newer models of the same name and other people who bought it before that, otherwise, not to make your customers feel like they've been screwed in any way shape or form is make something like LCD-X and leave it at that, or call it LCD-4 if it's supposed to be better, lower the price on LCD-3 and sell LCD-4 for the same money or something like it.
I'm not telling anyone how to run their businesses, I'm just expressing my own opinion, everyone has them, I should have the same right for expressing it as anyone else and I'm not offending anyone literally.