All hosts oversell. Even the ones that have nothing better to sell themselves on, claiming that they don't oversell, are still in an oversold environment because the data centers and their upstream providers oversell.
The "we don't oversell" marketing gimmick is almost as silly as the uptime guarantees out there.
The little hosts that do nothing but whine non-stop about it have pretty much made web hosting forums useless anymore because it seems like all they do is bash it non-stop, hoping to find a few suckers that will pay 5 times as much for half of the resources.
If all the whining out there was coming from actual customers, then the biggest hosts in the world wouldn't also be the biggest oversellers. A lot of them don't like when you point out that the reality is that people don't want to pay more for less.
Plus, due to lack of millions of dollars, most of them can't back up the offers that Dreamhost and the other big ones put out there. Instead of just accepting that and moving on, they try to make it sound like if they can't do it, it can't be done. It would be like saying Bill Gates couldn't give someone a new Lamborghini every Christmas, just because most people can't.
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