My question is more, is there any reason why it can't support this? I can't think of any reason why this shouldn't be possible, its really only a block in my mind.

You say there really no way to use include in upstream, but why is this? I know it can't currently but why?

Its not a case of the vhosts using the same upstream but more multiple machines including blocks of hosts within to support their task, would make what were trying to do cleaner and easier to mange.