It is not a question of reduced or increased capacity either way (although ultimately you can get in more with premium seats because of sightlines and angle issues above). The income per head is about the same (although, some premium seats for some games are more expensive). The issue is one of cost and flexibility.
As that section drawing shows, the construction cost of building boxes with overhangs and an extra floor and toilets and increased height and walls, floors and ceilings to a better finish and special lifts for relatively few people is higher than building premium seats (essentially but not necessarily a bigger seat) with shared hospitality suite behind (under the stand). So although the income might be roughly the same, what you make from boxes is less after taking off all those extra costs of building them.
And... if you put in 140 boxes, you have to sell 140 boxes. If you don't, they're empty and you're stuffed for the cost. But if you built premium seats instead and some don't sell, you can still sell them as 'standard' seats (without the wine & roses) and still make money.
And... the nice little executive tier there splits the ground up with old farts who don't make noise - the 'ring of silence'
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When was the last time you heard noise coming from the kemlyn or main stands?
Also it wouldn't be a ring, ala the emirates or wembley. It'd be 3 sides at most, but most likely 2. As for the outlay, short term it may be a detriment to profit, but having those extra boxes gives you options. Given the way the boxes in the Kemlyn are now there's nothing to stop there still being seats outside such that if the boxes aren't sold (and the boxes tend to be sold on a 3 year basis, except the TV studio) they can be sold to "normal" fans if the access is available.
Remember that the premium seats in the upper kemlyn have their own access point. You don't go through the normal turnstiles and just take up your seat. You go through the main entrance of the kemlyn, and through the suites before going up to your seat.
There's been complaints in the past that the club was just short sighted, that it didn't figure in the future. Well why not ensure that if there is demand for boxes that it's available. It's a case of if you price it right you'll sell them. If it takes an extra few years to pay extra off then that may have to be the case, but don't just rule it out because in the short term it may not be cost effective.
The NPV of a project is not based on just the next 5 years, it's the entire life of the capital investment.
Example, the club spends £80m upgrading the road end and main stand. It adds 15,000 seats but no additional boxes. The annual revenue increase from tickets is £12m (at a very conservative £42 per ticket per match average for 19 games). That takes 7 seasons of revenue to cover the initial cost.
Or the club spends £110m to upgrade the road end and main stand it adds 15,000 normal seats and 32 boxes. The 15,000 normal seats still adds £12m in ticket revenue whilst the boxes adds £2m a season. That means it takes 8 years of revenue to cover the initial cost of the works.
Just because it takes a few extra years to pay for something to have a better facility doesn't mean it isn't the right choice.
The club over the last couple of years has spent in excess of £3m upgrading hospitality facilities but there isn't a hope in hell of getting that money back in the short term. Price rises won't cover it in the short term and there's few extra seats to do it. But in the long term the club will reap the benefits from a better and varied offering.
