Yes, oversubscription is the name of the game, for airlines, Internet access, gym memberships, and also cloud-based compute. People don't use things 24/7 so the idea is you can sell more subscriptions than you actually have the resources to support if they actually used it 24/7.
You can buy all of those things in uncontested form (private aircraft, private gym, internet with CIR etc), but you can and should expect to pay more to not have other customers subsidise the cost.
