I guess it depends on what you consider to be the "natural" regulation-free state of things.

Without this regulation, would airlines be able to bump people involuntarily with no compensation at all? If so, then the regulation is a clear improvement.

Or would airlines be unable to bump people involuntarily without this regulation, being required to offer potentially unlimited compensation? If this was the case, then the regulation gets a huge share of the blame for this.

I'd think it would me more like the second one here, but I could be wrong.