I have never had stellar expectations for the performance of my beat up old 2002 KLR. I didn't pay much for it and it's not worth much. I just want it to work, which it does. For me it fills the gap between my R1200GS and my WR450F nicely, both of which have far superior suspension.
This statement has been picking at my brain; not because I disagree with any of it but because I think it illustrates just why there are fairly diverse opinions regarding the desirability of more extensive suspension upgrades. I think there are basically two schools of thought; the first uses the value of the bike as the primary metric and the other the functionality of the bike as the main criteria. I'm not suggesting either position is incorrect; only that they are very different ways of looking at the issue.
For me, I think that once you dig below the surface on the KLR, and get past the age of the design, extra porkage and budget components, you begin to expose the underlying offroad based DNA.....it's definitely there, but it is covered up. As I've said many, many times everyone's use and budget are different and I'm not espousing one "best" course of action for all. That said, for ME, I had a need for a certain level of competence from my KLR's in order to be able to do with them what I wanted to do.....while the cost wasn't cheap, the alternative was to replace the bikes with bikes that already had the suspension and capabilities I required.....compared to the cost of that (as well as other compromises inherent in those alternative bikes), the cost of full KLR suspension upgrades was relatively cheap. When I had other offroad bikes in the stable, I was also content with the KLR as-is because I limited it's use to much less challenging terrain at the time. I am probably an atypical KLR owner in that my decision to ride KLR's was based on considerations other than cost; simplicity, reliabilty, longevity and the availability of parts, for eg.
As you've said your BMW and your Yamaha both have "far superior" suspension (true, I have seat time on both), but it doesn't HAVE to be that way; while the KLR can't match the WR's suspenders even with upgrades, it can easily eclipse the Beemer's and can get closer than you'd think to the Yamaha. Is that needed? yes for some and no, for others.
All this to say; the KLR doesn't HAVE to have good suspension, only that the solution exists if you decide you need or want it....and it works very well.
Thanks to Beltdrive for providing the thought provoking comment and apologies, in advance, for the rambling and semi-esoteric post.