fix: update images to latest tag in manifests

[lexfrei]

Updated the hardcoded image tag for system-upgrade-controller to v0.16.3.

Notes:
Please move the tag on master after merging to ensure this change is included in the referenced tag.

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UPDATE (2025-10-24):

Changed approach based on maintainer feedback. Instead of pinning to a specific version, updated both images to latest tag:

• rancher/system-upgrade-controller: v0.16.3 → latest
• rancher/kubectl: v1.30.3 → latest

This ensures YOLO users following the official README installation method get current versions without requiring manual manifest updates.

[brandond]

I don't really want to get in the habit of bumping the version here in the checked-in manifest. If you want to use the manifest from git, use Kustomize to target whatever release you want. If you want a manifest that has an updated version in it, use the release artifacts.

[lexfrei]

Thanks for the feedback, @brandond! I understand your perspective on not bumping versions in the checked-in manifests.

I'd like to share some context from the ArgoCD user community perspective.

README Installation Method Issue:

The official README recommends installation via kubectl apply -k github.com/rancher/system-upgrade-controller. This currently pulls manifests with v0.14.0 image tag, while the latest release is v0.17.0 — that's 3 major versions behind. This creates confusion for new users following the official documentation.

ArgoCD Workflow Challenge:

For ArgoCD users, git sources work perfectly fine for deployments. However, combining Kustomize overlays with git sources in a single ArgoCD Application is challenging and adds significant complexity. The alternative — consuming artifacts from GitHub releases — is not possible in ArgoCD at all. ArgoCD simply cannot pull manifests from release artifacts.

Alternative Suggestion:

If you prefer not to bump specific versions in the manifests, would switching to latest tag be an acceptable middle ground? This would at least ensure that YOLO users following the README get a working recent version, while still allowing Kustomize users to override with specific versions.

Community Workaround:

Given these challenges, I've created a community Helm chart that's fully functional and actively used in production: https://artifacthub.io/packages/helm/system-upgrade/system-upgrade-controller

This chart is completely independent of #248 (Helm chart PR open since 2023). If there's interest in official Helm chart support for this project, I'd be happy to contribute this chart to this repository. I initially kept it separate given the uncertainty around #248, but I'm open to transferring it if that would benefit the community.

Closing Note:

I'm not pushing for this specific PR to be merged (especially since v0.17.0 is now out). I wanted to raise this feedback on behalf of the ArgoCD community experiencing these pain points with the current installation methods.

Thanks for maintaining this project!