At $349 I wouldn't expect many "upgrades", much less the pretty incredible spec sheet of the N5. For the price of a S4 you would expect more significant upgrades, but as you mention you don't get them.
Besides I disagree, there are some pretty good upgrades. The extra core for doing things with the phone asleep, etc. At the end of the day there isn't much left to upgrade to anymore, certainly not at $349. I get your point, I just don't think it's very applicable at this price point.
You are missing the point. I am not talking about arbitrary upgrades with nothing to compare it to. I am talking about upgrades compared to cost to the manufacturer and how that compares to other devices.
GS4 saw some decent upgrades. Price to consumer was the same as GS3. Nexus 5 is seeing some decent upgrades. Price to consumer is the same as Nexus 4.
With GS4, price to manufacturer was likely similar as GS3 as when the GS3 came out, Samsung was using the flagship standards at the time. With the GS4, Samsung used the flagship standards at the time. Look at desktop CPUs, GPUs, motherboards, etc. Flagship standards every year hover at around the same price.
Google gave some decent upgrades to the Nexus 5 while the consumer pays the same amount. That is no different than the GS3 to GS4 upgrade.