Legal or not, intentionally sellng more than you can provide in any service is a dishonest practice... so we are off to a bad start already.
Being that travel is not only about cash but also the consumer's time, people are right to demand the service on the date and time advertised by the seller. Clearly, compensation offered in this case was not enough (according to the market- the passengers on board) and needs to be reviewed if it failed ot create sufficient incentive, not forced by goons. If UA "bumping" procedure leads to physical confrontation in the cabin of their planes, then that procedure is ass backwards. Backing up a dishonest -yet legal- business practice with force is just slimy.