Only thing is that with the upgrade it costs 220 coins more, the upgrade building itself costs 8k gold + resources, and overall for those mass resources we get a rather expensive and mediocre monster, because if you pour money into genies, you'll most likely get rakshasas, and they are much more useful. And don't try to convince me that there's enough money for everything — the academy is not a cheap castle; with the capitol, it's impossible to buy up all creatures from levels 1-6.
P.S. so let's keep playing and look for a sensible use for genies; surely there is one, it's just not as obvious compared to other units.