Because the VPS technology doesnt know or care wat you've "bought" from your upstream, so how/why would it stop you overselling ?

You might be on a Celero-128 with 1Gb/month transfer allowance, but you could sell VPS's with 1000000Gb/month transfer - the virtualisation technology wont care.

Generally I see people moving to VPS from shared for some (perceived and usually non-existant) benefit, or simply because they're too tight to pay for a dedicated server - after all if you can get a VPS for $9.95 with 128Mb Ram, 250Gb space, 2000Gb transfer, surely that's as good as a DualQuadCore with 16Gb RAM and RAID-10 disks at $995/month