[mseebach]

You're just assuming overbooking away on a single, personal anecdote. Here's mine: I fly a lot on flexible tickets, and in periods have "missed" almost every flight I was scheduled on. But even your experience works out to about 1% missed flights (order of magnitude on "handful"/"hundreds"). If that pans out as average, then airlines should overbook each flight by a couple of seats, and expect to have to bump very few. "Just not overbooking" then amounts to removing a couple of seats from every flight. Only focusing on bumping completely misses this aspect.

[vannevar]

Not an anecdote, just a reasonable assumption in the face of a lack of actual data. With your full fare tickets, you say that there have been "periods" where you missed a lot of flights. How many overall? One in a hundred? One in ten flights you've ever booked? I suspect that if you add them all up, you'll find that your experience is not that far from mine. We tend to recall aberrations better than the routine outcome.

Eliminating the fraud exemption for airlines wouldn't necessarily mean removing seats; as I pointed out, the seats could be filled with discounted standbys.

Lots of other businesses sell seats without overbooking, I hardly think it's an unsolvable problem. Airlines got a fraud exemption because they could, not because it was the only solution to the problem.