i'm sure everyone is going to have basically the same opinion; focus on music. new basses are nice, but they wont make you a better player. they'll hardly even make you 'sound better.' they will allow better players the ability to sound better, but can't make bad playing good.
as far as "when to upgrade," it depends. i bought a nice USA fender when i was 12. could i play then? not really, i knew some blues stuff and zeppelin tunes, that was about it. but for me it was time to upgrade because i worked all summer to be able to afford that bass. i was 12, and when i had that kind of money (exactly $630) there was no way i wasn't gonna get a nice bass.
retrospectively, i was pretty dedicated- i worked my butt off, never once considered spending that money on anything because i knew i wanted a bass. i supposed dedication like that is an indicator that it's appropriate to get a nicer instrument.
the only time i think you "have to" upgrade is if your pursuing music professionally, or a music major at college, and don't have a pretty good instrument. doesn't need to be great, but should play properly, be reliable, and sound pleasant. (usually that's the case with DB players, though.)
if you think about it, (just like me when i was 12) the one thing really standing between you and a new bass is money. for people who have it to spare, whenever they want is the "right time" to upgrade. for people who cant, once the instrument is actually limiting their potential is the time.
basically, once you decide its worth the money, its time to buy a new instrument; but never expect that to make you a better player, because it just wont.