I do not understand why the majority (if not all) trophy upgrades drop from chests.
it would make a lot more sense for upgrades to logging, mining, harvesting etc. trophy to have a chance to drop from the activity they are upgrading - i.e you cut millions of trees you have a chance to get the upgrade materials for the logging trophy, same for mining, harvesting and so on.
The trophies that give you benefit for fighting that specific type of NPC (corrupted, lost etc) the NPCs from this type (maybe high-level elites) have a chance of stopping the upgraded item.
Currently, you are kind of forced to do chest runs just for the chance of getting an upgrade for the trophy you want.