The upgrade icon seems to be working fine for me, Brian. And its working fine on a number of sites I checked. Could there be a problem with your environment?
In terms of the suggestion to link via https to the image, we currently don't have the update.dotnetnuke.com set up for SSL - but it is a possibility. For now, I have checked in code for issue DNN-5616 which solves the problem by not serving the image tag if the request is running on a secure connection.
The topic of the upgrade icon behavior has been discussed numerous times over the past year. Originally it served a green checkmark icon if there was an upgrade available and a red cancel icon if no upgrade was available. This resulted in complaints because the red cancel icon is usually associated with errors. Therefore, we change the red cancel icon to an invisible gif instead.
I think the best solution would be if the image served was more descriptive. For example, if there was an upgrade available, it could display "Upgrade Available" or "Version ##.##.## Available" or something similar. The problem is that the application is used by both English speaking and non-English speaking users. If we served an image which contained English words, it would not be a truly localized solution. Now obviously it would be technically possible to serve a localized image. Unfortunately, we are not passing any information about the preferred language in the querystring to the upgrade service. Therefore, we are missing the data required to perform localization. We had considered adding this information to the querystring, but ran into a dilemma because of privacy concerns.
Anyways, as you can see there is a great deal of consideration and deliberation which goes into core enhancements. We always try to understand the impact/risk and weigh the various pros/cons to make the optimal decision. Obviously all the factors contributing to the final implementation are not always obvious when the feature is delivered. And we sometimes make mistakes - although usually they are easily addressed through a minor modification.