I disagree. As long as the number of bumped remains reasonably low, the cheap seats take their chancesNot regulation - education and more flexibility.
The cheap ticket buyers should be told explicitly : "You are getting a ticket at less than 40% of the full fare economy price. If this flight sells out and we are overbooked, you and your family are in position #7 to be bumped off the aircraft"
"Would you like to purchase an upgrade at $$$$ or a "never bump me off" guarantee coupon at #### so some other sucker takes your place in front of the line to get bumped?
That could work, but this sort of transparency isn't there yet. The solution you are proposing is a form of regulation. Customer 'should be told'.....