QR are hardly alone in overselling flights, pretty standard practice. Where QR do seem to differ currently is that virtually all their flights are at (or over) capacity.
As for your other point, if QR could really oversell twice as many flights as currently (which I doubt) allowing them that capacity would at least start to address the current under supply of capacity of flights to/from Oz. If true there is clearly a need and I see no reason to deny supply to meet that need.
For the record, I do believe that Qatar should be granted the additional traffic rights, but I don't think it's fair to say that this happened specifically because Qatar were denied additional traffic rights. It's their commercial decision to oversell these flights, and they must know that if almost every single one of their flights are oversold, customers are unlikely to be able to be booked onto a flight within a reasonable delay if bumped and instead will have to wait much longer (vs. just a few oversold flights here or there).
Additionally, customers only finding out that they've been bumped after arriving in Doha is also suboptimal, as had for instance the customer found out they've been bumped in Europe, there would be lots more routing possibilities to get them back to Australia with minimal delay on other carriers, whereas flying out of Doha you're basically limited to QR. I understand they probably don't fully know the loads until the very last minute, but obviously this doesn't lead to a good customer experience (they must've known 12 hours before that there's a high chance that someone would need to be bumped, but it was a commercial decision to wait until the last minute).
Also, I would note that
@Spizz was flying to Adelaide and was told that the next Adelaide flight was oversold as well (in addition to their ADL-DOH flight outbound being oversold too), and yet Qatar has unlimited traffic rights into Adelaide.
Would the situation be better if Qatar had more traffic rights into SYD/BNE/MEL/PER? Yeah, probably and indeed they should be granted them. But this situation is Qatar's own doing (especially one customer coming across 3 oversold QR flights on one trip, all to/from ADL where they have unlimited traffic rights).
Does anyone know if there's been weather/technical/other issues causing cancelled flights on QR between Australia and Doha (which would be at least somewhat understandable since the displaced pax would result in overbookings), or is it just QR deciding to allow overbookings to this degree from the get go?
. 
