Personally I would put the $1,250 towards paid tickets for the jfk-lax trips (assuming that you can snag decent deals) to save the united miles and earn miles + status on those flights.
Most people don't fly to LA every other week
Do they actually give upgrades for awards tickets? Would you need to buy standard award and not saver?
Considering all the new fees UA implemented you may save yourself a pretty buck especially if you only fly on award tickets. Paying for any change to your flight can add up very quickly.
You will earn double miles on paid flights which would amount to over 50k a year so that should balance the cost out
Since you have a United credit card you could get upgrade for award tickets including saver.
I'd consider it a fair price. Primary benefit is upgrades on domestic flights and free changes/redeposits on awards.
Does it actually happen?
Domestic is very frequent.