Yeah, you're not upgrading your servant's star rating, you're just ascending them. Just like 1*s at max level don't cost as much as 5*s at the same level.
And it's actually fairly weak, you get approximately a 10% increase to the servant's stats per 10 levels, so higher-star servants don't get as much out of it, while lower-star servants usually don't have enough raw stats for the 30%-50% stat increase to be that huge. Not to mention grails are scarce, you can only get 11 so far including the ones from events and you need 5 just to go from 90 to 100.