But during the heartbleed attack when their systems were shown to be vulnerable, that was one of their arguments as to why it wasn’t so bad.
LastPass is full of clowns. There's already two examples of their cavalier approach to what should be simple security in this thread and I'm pretty sure there are more.
Just the other day a co-worker brought up this idea as an offhand remark. After bouncing it off those present, it took him all of twenty seconds to see why it might do harm and will do little good.
You'd think a password manager would employ some security minded people who could shoot down ideas that bad immediately.
Any hash upgrade mechanism can be abused by a (possibly MITM) attacker to change a user's password while leaving you and the user none the wiser that specifically this occurred. If you need to lock someone out while their phone is beeping at them over their bank account being emptied, while not even making it look like their password was changed, that sounds like a fun way.
Lastly it's virtually the same as plaintext, since any salt will be known by even just a passive attacker. A true MITM won't even have to brute-force the hash.
Conclusion: Might do harm, will do little good.