I can accept the restrictions on elite but to downgrade an existing ownership is greedy and shows they are worried about resales. I guess the best way to accumulate points is to buy via Shell Western clubs which are points only systems.
I doubt that this is a downgrade of an existing ownership, more likely a deeded week that was never upgraded (or converted) to points. There is a fee to convert deeded weeks to points, and it can be pricey, which is why so many people balk at doing it. That's why most people recommend that you buy weeks that have already been converted to SVC points, or just buy points (on the resale market of course). I think you might have been misled by the person you purchased the points from (or perhaps they didn't understand the system either).
You can purchase SVC points in any of the home clubs, but the most common ones you'll find on sale are in the Hawaii, Western and Southwest home clubs. It's smart to buy your all your points in the same club (lower maintenance fees), and to select the club that contains resorts that you'll be visiting most often (preferred reservation window).