Kies: Firmware can not be upgraded?
Kies can and do say that which is quite annoying, due to different regions and the roll outs, some go by carriers as in comes with carrier branding, others by actual region. Its frustrating - I know! :D

Go to samfirmware, and use odin to flash it yourself if that's what you want to do. 

Don't trust Kies in respect to flashing. :) The necessary tools are available on that site if you want to go down the unofficial route. 

If you're on Linux, use Heimdall which is a lot more safer than Kies and is cross-platform friendly.

The onus is on you to read, read, research and more reading if you want to do this by yourself :)

Caveat Emptor: No virtual machines (virtualbox/vmware) with windows running Kies in there - otherwise your handset is a nice paperweight!