That situation is not common. About 1% percent of car rentals aren't honored because a car isn't available. Part of the reason is that they accept more reservations than they can handle, anticipating some drivers won't show up. Another part of the reason is that the car rental industry, unlike many hotels and almost all airlines, still allows you to cancel or miss a reservation without paying a penalty.
Major rental car companies don't knowingly grossly overbook with the intention of leaving a sizable percentage of their customers stranded everyday. Sure it happens, but it's not a regular thing. First of all they wouldn't do that because it would ruin their reputation. Secondly, you have to operate in good faith. If this was standard operating procedure, over time they'd eventually find themselves in a class action suit for lack of execution.
Normally, when a car rental company runs out of cars in your class, it's industry practice to offer you an upgrade into the next class of vehicle at no additional charge. And when they have no cars they find other remedies. Per the Budget-AVIS group “In the rare occurrence there are no cars available, we attempt to get the customer to their destination (via taxicab, etc.), if possible, and when a vehicle becomes available, it will be delivered to the customer. In the event that this is not possible, we advise the customer to check availability/rates with other providers. We then match the rate originally confirmed and reimburse the customer the difference between the original rate and the rate they paid.”
As you can see by several posts in this thread the rental sites are indicating no cars are available. They stopped taking rentals for certain dates.