Weighing in:
Oversigning is an awfully broad term. It can be as innocent as a minor gamble on some players you're certain will transfer or as malicious as amassing LOIs and working out the details later. I liken this to the issue with partial and non-qualifiers that plagued the Big XII. Enough people got grumpy about what they perceived to be abuse of the system or loopholes that the NCAA was forced to tighten the rules. Is oversigning within the current rules? Yes, it is. Are there cases where it is morally or ethically wrong? I think so. In general, I think most would find it offensive what is happening to some of these kids if given all of the facts. I know I would be [censored]ed if my child went through the following: had a scholarship offer to LSU, Wake Forest, and Mississippi State. Took the offer to LSU. After a redshirt, and a season without a lot of playing time, he gets jettisoned from the team to make room for another player. The coaches publicly say he didn't have the fight or determination to compete at the college level but I know it is bull[Mark May]. He would have been at least a 3 year starter at Wake Forest and would have gotten one hell of a degree but he gambled on a chance to go pro and now we're left with division II ball. That is the kind of thing that if parents and athletes knew going in to this they may reconsider some of these SEC schools that habitually adopt the motto: "win at all costs," even if it means dragging kids through the mud and ruining their careers. If the rule allows for even the slightest slime ball maneuvering it is a bad rule and needs to be tightened. Fans trash kids when they go back on a LOI or transfer but don't feel their school should be held equally accountable if they go against their agreement with the kid? This is a double standard. Is oversigning the catalyst for this behavior? Probably not, but it is the loophole that allows it to happen. The true root cause of this is college football programs viewing their student athletes as disposable and simply as tools to succeed. Not as people and not as students.
In terms of competitive advantage, it certainly does provide some level of advantage. Simply from a statistical standpoint it does. It is hard to judge how significant or minute that advantage is and it would definitely be circumstantial--but one exists. It is probably less of an advantage than monstrous athletic budgets, state-of-the-art facilities, and a campus that is equaled by very few. But it is still an advantage. What's more, the former aren't viewed to be ethically or morally questionable by many if any at all.
Conclusion:
Are all that oversign bad guys? No. I think there are some teams that have had a lot of success gambling in the oversigning game and haven't had to break any moral or ethical obligations to kids on scholarship. Are the few that abuse the opening in NCAA rules that allows oversigning? Yes, and in many cases those same programs are engaged in conduct that is just wrong when it comes to obligations they have to these kids. For that reason something needs to happen.