Its working as intended, each tile has a value which determines how hard it is to transform based on the continent map. On higher class planets all the lower value/easy to transform tiles are taken first by the planet class leaving only harder to terraform tiles which require the better tech.

Whether or not this is a good thing is debatable, but its been brought up before and that's basically the extent of the explanation we were given. I'm paraphrasing of course.

That's how I understood it also.

But while we are at it, I would rather like to have a mechanism where Terraforming is not a number of techs that allow to transform a single tile each, but rather a project that you can initiate to transform a single tile (which you can choose yourself, and while doing so the terraform difficulty in terms of time to terraform is shown for every field) and then it lasts a while dependent on the terraform difficulty. That you could then repeat for every tile you like without constraint (apart from tiles that are marked as not terraformable, deep ocean and the like (while that could be different for each species, oceanic races would have no problem with deep ocean)).

Tech progress would still be possible in that more advanced techs reduce the terraforming time and/or (somewhat in contradiction to what I said before ) are necessary to be able to terraform tiles that exceed a certain difficulty.

The cherry on the cake would be if you could choose at start of the terraforming process which imporvement to build on the newly available tile, because then you could queue several terraforming orders without losing production time (meaning that normally when you queue several terraforming steps you end up with a bunch of emtpy tiles that could be already productive if you had built an improvment on them right away after terraforming, but as it is you would have to queue only one terraforming step and nothing else to be notified after completion so that you can build your improvement ... I hope that is not too convoluted to understand what I mean ). 

To the OP's point, though, I do wish there was a mechanism in the game by which the terraforming tech would be grayed out if it was unusable and had a tooltip that stated something to that effect.

I like the idea of a more varied approach to terraforming--where a combination of technology, improvements, projects, and maybe even a special starbase ring/modules could all be used in concert to give planets higher class... I've been experimenting with some of this, but my modding skills are modest.