The same people who are shocked to find that BA would downgrade a 2-4-1 and sell an UG into the vacant seat created by the downgrade should realize that this is no different than most carriers' practice of selling its most valuable passengers a full fare ticket even on a sold out flight by simply overbooking by one more seat. This is done knowing that the one additional sale may well mean one more passenger is displaced. While it is debateable whether downgrade is better or worse than being denied boarding, the underlying practice is roughly the same.
As to whether a carrier can effectively downgrade for other than the EC 261/2004 refund --- it is not compensation --- the fact is that this is easily accomplished for exactly the reasons discussed in this thread. There are many people who have flexible schedules and may indeed wish to stay put for another day, perhaps more. If BA is prepared to rebook them a day or two later, perhaps pick up their hotel and maybe even rebook into a higher class of service on a less busy flight, there has been no downgrade.
The volunteer is happy, he has 1-2 more days somewhere he wishes to be, all paid for. BA is happy because it has shifted a costly situation into a dirt cheap situation (BA's negotiated rates for hotels where it does business are a fraction of what the public pays) and BA has avoided the cash outlay under EC 261/2004 and everybody gets to fly in their ticketed cabin.