I know a LFS that did that with Yellow Tangs. They got in 50+ of them and put them in a 125g. They were small when they started, but over time, as people bought them, they thinned out and grew larger.
The 'overstocking' method is something used with african cichlids (heck, all cichlids) as well. Too many fish = diffused territories. Ive seen the same done with dottybacks. A guy near me put over a dozen in a 210g, and because there were so many, none established 'their own' area.
The only downside is that if there are any 'runts', they may not have a chance to compete at all because the status quo prevents them from blending in as well. This was often true when I raised africans/bred them. I would keep a whole breeding colony, and that one small male or female that couldnt put on weight like the others would get picked off eventually.