My opinion is that United WAS following policy.

UA allows CSRs to rebook passengers on oversold flights when their situation is serious. This is up to the CSR's discretion.

As seen in this thread a HUGE majority believe that 4 pax missing a SYD connection is serious, and most think that a missed SFO-LAX connection is a lot easier pill to swallow.

What the CSR did is certainly not against policy as policy allows them to make a judgement call in this case.

You were #1 on the standby list, and policy was followed in that case. No standbys trumped you, only disserviced pax (this is up to the CSR/GA to define).

Popular opinion here seems to dictate that UA's judgement call was the correct one.