If my memory serves correct the company was installing the second jumpseat but stopped for financial reasons. This policy was a remedy for the second jumpseat on lieu of restarting the installation program.
The first time I saw the policy utilized was in IAH. The faces of the CS agent and supervisor once they realized they had to pull a passenger was priceless and something I'll never forget.
Props to James, the Godfather, for mentioning that the jumpseat is the Captain's. A fact that is often overlooked not only by the pilots but the company as well.