Airlines are currently permitted to overbook flights under the auspices that individuals frequently fail to show up/check-in for flights.
In the event you find yourself overbooked, airlines are forced to make "restitution" under the guise of additional travel arrangements and "compensation."
The problem with this model as I see it is:
Compensation, which is determined by whether your flight is domestic or international, has a cap - $650 for domestic flights and $1300 for international flights.
For international especially, the "compensation" is not even equal to the cost of a ticket i.e. why wouldn't an airline overbook a flight? It's profitable!
There is no other business model that I can think of where selling something you do not own, does not constitute fraud.