In a highly competitive industry a regulation that prevented overbooking would have near zero impact. Ticket prices would rise to compensate, but a 5% change in price would have minimal impact on overall utilization.

That said, it's very hard for one airline to avoid the race to the bottom unless they spread that across the company's processes. AKA, we don't double book, we don't have ridiculous fees etc, your ticket costs X% more, but and they capture a different market segment.