I think the Right Answer is for the airlines to sell two different ticket classes: guaranteed seats, which may not be oversold, and standby seats, which can be. That way everyone knows what they're getting.
Do remember you can't pass security without a confirmed seat. They can't load your luggage without you being confirmed and through security. If every flight on every airline tried this as SOP it would turn out really badly.
If you think I'm kidding check the news around a major holiday with inclement weather. Hoardes of people with standby tickets waiting in terminals, camping out in whatever floorspace they can find. Sounds pretty damn dystopian.
No more than they do now. The only difference between what I'm proposing and what is currently done is that the people who get bumped if too many people show up "volunteer" ahead of time.
That's the practice in the article, passing ticket holders along and telling them the seat will be assigned at the gate, well after baggage is checked and security lines have been waited.
Selling standby seats at the same/similar overbook ratio as they currently do wouldn't lead to any more of a dystopia then we currently have.