is it me or have LU got their priorities completely wrong?

Perhaps they feel the 95 / 96 stock will last another 20 years! The 92 stock certainly won't!

You need to consider the 95 stock is provided by Alstom under a train service supply contract. I believe the contract with Alstom provides for a mid life refurb which will explain why there is an apparent concentration on the Northern Line stock now. While the Jubilee Line stock is not supplied under a PFI deal it's only a little older than the 95 stock but is being worked hard because the fleet size is borderline too small for the service operated. Making sure the stock is reliable and refurbed makes sense. As others have said there is probably more of a prospect of this stock lasting a full life time while that may not be the case for the Central Line where LU have clear aspirations to get rid of the 92s and put in the next generation of tube stock on the line.

I know the 92s are not in the best of states but the fundamental issues have been addressed in recent years - bodywork and the bogies IIRC. The interior refresh was more to do with smartening the fleet for the Olympics given the heavy reliance on the Central Line to get people to Stratford. There is little point spending a lot more money if the intent is that the fleet will be gone with 10-14 years (I'm guessing as to the time span as I've lost track as to what upgrade is scheduled for when).

I'm not sure the lifespan of the 92 stock is relevant to them being refurbished, although it may have a bearing on how much money can be justified on less essential works. There are three main issues with the 92 stock - obsolete electrical components from the 1990s, condition of the bodyshells, and disability compliance. The fleet replacement plans are in no way finalised yet, but whatever happens it's unlikely the 92 stock will be replaced until the late 2020s at the earliest, which will give them a roughly 35-year lifespan. All of the three issues will need to be addressed well before that. The main priority, given a need to justify expenditure, is replacing the 73 stock, as part of an upgrade to increase the capacity on that line. At present the Central Line achieves 34 tph in the peaks (albeit only just), which is way above what the Picc currently achieves, this alone makes the Picc upgrade a greater priority.

Remember the D stock was subject to a quite extensive, albeit less extensive than originally planned, refurbishment with roughly 10 years service life left. Whatever happens, the 92 stock has at least 10 years life left, probably quite a bit more. I think the issue is more that the 92 stock requires more extensive work to achieve disability compliance compared to the 95 & 96 stocks, which in their as-built form were already pretty compliant, and the level of work required to bring the trains up to standard was fairly minimal. In business speak, this is referred to as a "quick win". By contrast, the 92 stock will require some more substantial internal alterations.

With the 95 stock being very much a 'modular' train, where components are quite literally changed out in a short space of time, something like replacing the desination indicator is a relatively quick and cheap job, as evidenced by the speed the new indicators have been rolled out. I wouldn't mind betting that the 92 stock destination indicator isn't fully compliant with current standards, and unlike the 95 & 96 stocks I would suggest it's probably not possible to fit a compliant indicator in the space available, making it a more substantial and costly piece of work on those trains.

The 92 stock has been a disaster from the start.

They thankfully will go before the 72 stock.

CIS = Customer Information System

So yes, DMIs would need to be added in order to fully comply. Perhaps they could place one above each interconnecting door á la the '86 stock, although this could be quite taxing on the customers sitting in the middle part of the car.