Cranky Flier explains:
You might think that airlines hate when they have to bump people, but that’s not really true. They hate when they have to involuntarily bump people.
These are bad. If the airlines can’t get enough people to volunteer to take a later flight, they are forced to bump people against their will. Naturally, that means that there are going to be some angry people who don’t get on that airplane.
[T]he penalties for involuntarily bumping someone have gone up a lot.
Not only can the penalty now be 4 times the value of the ticket, but the cap has been raised to over $1,000 (and rising). With the potential cost going up, airlines have had to get more conservative on how much they overbook.
He lays out some more details about how airlines work it out.