I don't see how this is good for passengers whatsoever. With advanced ticket purchases a reserved seat is already possible, telling people they can't stand just takes away passenger options.
Trains are an entirely different beast to planes and should not be treated the same. Sure high speed rail in Europe operates slightly differently, offering international travel but UK high speed rail also operates as a commuter rail service for many customers. (e.g. someone may commute from Stoke On Trent to Manchester.) Also passengers on planes have to be seated by law for takeoff and landing so...
If you don't want to stand or get a cheaper fare on a Virgin service, book in advance and avoid peak times. Otherwise, this plan just takes options away from people who need flexibility.
Other routes such as cross country have such little capacity that standing is almost a guaranteed part of a journey, so removing the option to just stand would reduce capacity considerably. Again, these routes are also a common part of people's commutes...