Oh I'm well aware of the common practice of over selling a flight, however I didn't think that regional/commuter carriers did it.
When you've only got 40 seats to play with the law of averages doesn't work as well in your favour as when you've got 400+. Also the flights are more time critical for the passenger than medium/long haul, where the difference of a few hours might not matter.
In any case the reason these pax couldn't board was because the aircraft had been changed for one with fewer seats, at least that's what the check-in staff said.
Most airlines will take the chance that not all passengers will turn up. This is more evident now given that many airlines offer no refundable tickets of any type anymore. It's probably single figure percentages of flights that actually go completely full with every passenger seat taken.
You're correct, it is a law of averages and it will work in the favour of any airline depending on how many they overbook by. I think I remember being told that it's not uncommon for BA/VS to overbook there by as many as 35 passenger upwards on a 744.
The EU now govern what an airline pays a passenger that's 'bumped' off a flight and its a pretty penny! Before EU rules came in, I was asked if I'd give up my seat on LHR-Dubai. BA offered me a flight in 10hrs time, meals, refreshments, and upgrade to Club on the later flight and either £250 cash or £400 in BA travel vouchers! - The vouchers were more than the cost of my holiday so damn right I'd take a 10hr delay! In the end they had enough 'no-show' passengers that I wasn't needed to come off, but they still gave me a Club seat as a thank you.
I imagine that most airlines with relatively small aircraft (regionals) who overbook, do so by maybe up to 5 passengers but they will have pretty good historical data by which to base their predictions.