Anecdotally, it would seem that Metro's Vermont corridor is one of the most heavily used bus routes in the City of LA. There's a regular bus, the 204, which has frequent stops and a Rapid bus, the 754, which stops every half mile or so.
I ride these buses regularly and during heavy travel times they get very full, despite their frequent service, and extra-long "accordion" design.
Sometimes they get so full that the driver just waves everybody in the back doors. No need to pay. No need to register how many people get on. Let's just get this damn bus moving so I can keep to my timetable. It's understandable.
The problem is the lost revenue and the lost ability to understand how many people are riding that line. Since fewer riders register at the farebox, Metro probably thinks the ridership is lower than it actually is, which means they're less likely to put out more buses, which means the problem of waving people in the back, lost revenue and lost registered ridership will continue.
As Browne over at The Bus Bench is fond of pointing out, maybe if more of Metro's employees rode Metro, they'd be better in tune with such problems.