Oh good grief, why is this concept so hard to understand?
They only need to validate the upgrade on an existing Win7/8 installation, not actually install it! There's no reason whatsoever why they couldn't have a system whereby they validate your system as eligible, register your product key and/or hardware hash on their servers and then just have a message to the effect of "You are confirmed as eligible for a Windows 10 upgrade, do you wish to install this now?". You'd then have the option of not actually doing the in-place upgrade but instead downloading the ISO and installing afresh.
Of course they need an existing, licensed Win7/8 installation to validate the upgrade but that's all they need to do. They do not need to force you to actually upgrade the installation.
Your suggested 'system' is the upgrade!
You validate your system as being eligible and register your key and hardware hash by doing the upgrade. It really is very simple to understand.
You, like a lot of people on here, are just blinked by your own individual view of the world. 99% of all people using Windows will not do a clean install or want to download an ISO or anything. They will click a button, and get Windows 10, simple as that. Almost all those people will be OEM too where an ISO is irrelevant anyway.
Why would Microsoft go to the efforts of making a separate system to cater for the 1% of people out there who use ISOs? You've just got into a bit of a hissy because you are in that 1% and have decided that the entire world is against you.
And then there's the added point that ISOs aren't needed anyway for your clean install. Once you have taken the upgrade you just hit Reset PC within Windows 10 and it does it for you. Hey presto, clean install, no ISO. You only really need an ISO if your building a new machine.
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