The airlines know that a small number of people will not make their flight. If they plan the overbooking correctly they can fill the plane with happy passengers, some of whom wouldn't have got a ticket, and make it right for the the people who missed their plane (let them on a different flight that wouldn't be full).
If they sold tickets up to the plane is full, no more: they would have to charge people for missing their flight since the seat left without them. While that might be legal (and moral?) it isn't something people like to happen to them, so the airlines sell just a little over so that they can tell the guy who missed his flight, "sorry, but you can use your ticket on the next flight so you are only out your time."
In short overbooking when it works right is a way to earn some goodwill from people who make a mistake.
If they sold tickets up to the plane is full, no more: they would have to charge people for missing their flight since the seat left without them. While that might be legal (and moral?) it isn't something people like to happen to them, so the airlines sell just a little over so that they can tell the guy who missed his flight, "sorry, but you can use your ticket on the next flight so you are only out your time."
In short overbooking when it works right is a way to earn some goodwill from people who make a mistake.