These people are not "milking" the system. Frequently the airline wants to assign seats to the highest-paying customer. That's why they frequently will bump people and pay them handsome compensation. They make more money by letting someone who will pay more have the seat. So actually the airline is usually the one "milking" the system on bumps.

It wouldn't surprise me at all if the airline sold or assigned any seats it gets in this way to full-fare customers rather to the person who has been waiting the longest for a flight. So even when losing money, the airline is trying to maximize profits, and they make more money by paying compensation for the bump.