I'm torn on this. On the one hand I do not favor laws for everything, and I resent government over-involvement. On the other hand, people are selfish and corporations are run by people, and not even the magical free market means "anything goes". If this happens, the airlines will have brought it on themselves... just like the eventual UHC we're going to get will be brought on by health insurance companies. So, I voted "I'm open to it", but I lean toward yes, though not wholly. Some random thoughts...
1) Spare me the terms of the purchase now. The thread is about "Should a law be passed that bars airlines from overbooking flights?", not what current conditions are, though current conditions are what's prompting the question.
2) I don't have stats, but I believe that bumping is actually fairly rare, statistically... though I wouldn't be surprised if the airlines are becoming more emboldened and pushing the envelope more in the ever-increasing quest to maximize profits.
3) I believe some of the types of instances we've been seeing lately have been occurring for quite some time, it's just now that the media and populace started to care.
4) If you watch some of these videos, especially the recent Delta example where the flight attendants threatened a family with placing their kids in foster care, that the FAs themselves are feeling emboldened as if they have great and almost unlimited power and they're lording it over the passengers. That's going to bite the airlines in the butt in the long run. If the airlines are smart, they'll reel that back in.
5) IMO, when you purchase a ticket, that IS your contract and reservation to a seat. Period. If you show up, it's your's. If you don't show, you forfeit your money. The seat is still paid for, so the airline isn't losing anything. I do favor a change in law stating that. I don't fly much anymore, but it's always been my impression that most tickets are non-refundable.
6) The only way that an airline should be able to make EXTRA money in the event of a no-show would be to sell said no-show seat to a 'stand by' passenger.
7) Someone in the thread mentioned possibly having a two-tiered pricing, and that sounds doable. If you pay a nominal premium to literally lock in your seat it is your's. If you don't, it's not. But then (provided the locked-in premium is reasonable, 10% max), and you do get bumped, compensation should be limited and consistent... and specified as X% what you paid for your ticket.
8) I don't expect an airline to take a loss on a seat, but if somebody paid for the seat, they're not taking a loss.