Using 'downgrade' can imply disappointment or disapproval regarding the reduced status. The director's decision to downgrade the film's budget showed his lack of faith.
Pro Tip 2/3
Not Reversible
'Downgrade' often suggests a one-way action, not expected to be undone quickly. Once the policy was downgraded, few believed it would regain prominence.
Pro Tip 3/3
Subtle Warning
May be used to diplomatically signal a need for improvement or caution. Due to recent issues, we must consider downgrading our expectations.