Actually, the OP is not a customer. A customer is someone who delivers money. Upwork treated their actual customer quite well: they refunded him and talked to him like human beings - even told him the reason why the OP was suspended.
I do not think that is very sustainable long-term... I think you'll be able to find much better quality workers in system that is more equitable.
However, systems like that don't exist.
I think freelancers are a major part of the problem, especially those who are very desperate for work. For an equitable system to exist you must be someone who is ready to say no at any point of the getting to know the project phase.
As a designer i find it easier to close deals on the phone and imagine other experienced freelancers operate the same way. Unfortunately a call based system is inherently wrong for an online platform that aims to earn profit on project fees. The reason upwork has been successful is because it charges fee on a project vs charging the customer or freelancer a flat fee and sadly such setup is not ideal for a freelancer who may be looking at projects in the tens of thousands range.
The problem is not, as you seem to be hinting at, some mediation or escrow for freelancers, which is what the majority of Upwork is.
I think you could have a great system that "puts people in touch with each other" in a professional way. Maybe invite-only? Hmm.
If you do enough mental gymnastics to argue that they are... Well, then the word has lost all meaning.