They're not different from the guy who rents his cabin to 3 dozen different people for the summer, hoping that no more than one will show up at a time.
Yes, or like those pesky phone companies whose capacity on the switchboards could nowhere near handle all their customers picking up their phone and making a call at the same time.
You may not like it but if you want an internet connection that's not overbooked you definitely wouldn't like the price. You can get a 20Mb DSL line here for about 25. Guess what that price would be without overbooking?
Overbooking is a way for the ISP's to provide a service at a decent price by planning for average usage. The system keeps itself in check: If they overbook too much they'll lose customers to ISP's with better service, if they don't their competitors will steal their customers with lower prices.
One of the points that I hardly ever see in these discussions is how some of the p2p protocols seem hell bent on squeezing out the last ounce of performance, never mind that it chokes up routers and screws with everybody else's connection.