You have to expand \insertsectionhead before applying \MakeUppercase:
\documentclass[]{beamer}
\newcommand{\insertsectionHEAD}{%
\expandafter\insertsectionHEADaux\insertsectionhead}
\newcommand{\insertsectionHEADaux}[3]{#1{#2}{\MakeUppercase{#3}}}
\begin{document}
\section{Section 1}
\begin{frame}{Frame 1}
\insertsectionHEAD
\end{frame}
\end{document}
In your case \insertsectionhead expands to
\hyperlink{Navigation\the\c@page}{Section 1}
so we add before it \insertsectionHEADaux that gets \hyperlink as argument #1, Navigation\the\c@page as #2 and Section 1 as #3, and eventually
\hyperlink{Navigation \the\c@page}{\MakeUppercase{Section 1}}
is executed. In this way the link name is not uppercased.
A different solution is patching the commands responsible for defining \insertsectionhead; this might be better, because it doesn't require different commands in the document.
\documentclass[]{beamer}
\usepackage{etoolbox}
\makeatletter
\patchcmd{\sectionentry}
{\def\insertsectionhead{#2}}
{\def\insertsectionhead{\MakeUppercase{#2}}}
{}{}
\patchcmd{\beamer@section}
{\def\insertsectionhead{\hyperlink{Navigation\the\c@page}{#1}}}
{\def\insertsectionhead{\hyperlink{Navigation\the\c@page}{\MakeUppercase{#1}}}}
{}{}
\makeatother
\begin{document}
\section{Section 1}
\begin{frame}{Frame 1}
\insertsectionhead
\end{frame}
\end{document}
{\MakeUppercase\protect\insertsectionhead}for\MakeUppercase{\insertsectionhead}. – jub0bs May 05 '13 at 07:26