Tragedy of the commons- have we been buffaloed?

We all know the story about how buffaloes almost went extinct - it's a phenomenon economists call the tragedy of the commons.  Here's how Bailey Norwood and I described it in our undergraduate textbook:

Consumers want beef today and they will want beef in the future. Ranchers understand this, and when they sell cattle they reserve some males and females for breeding. This is an investment. They forego the money they could have earned by selling cattle today, electing instead to produce more by breeding, earning greater profits at a later date. . . . Consumers in the nineteenth century wanted buffalo hides today and in the future, so it was in society’s interest to not kill all the buffalo. By leaving some males and females alive, one could be assured of buffalo hides in the future. Despite this obvious truth, hunters tried to kill them all. The reason is that no one owned the buffalo, so if you decided to leave some males and females alive to breed, another person may come and kill them. Better you benefit from the kill than someone else.

Is this common knowledge about the tragedy of the commons all wrong?  The economist Peter Hill thinks so.  Here is a snippet from his contrarian take in The Independent Review:

The history of the American bison is one of rational individuals operating under an institutional framework that did not create a tragedy of the commons. It is true that property rights were not well defined and established for bison on the open prairies, but because bison were not a valuable resource, property-rights entrepreneurs put little effort into establishing rights for them. And even if there had been well-defined and enforced property rights, cattle would still have replaced bison as the primary converter of grass on the Great Plains. The adjustment from bison to cattle may not have been perfect, but there is no evidence of large-scale rent dissipation. When bison did become valuable as they came close to complete extermination, entrepreneurs established rights to live animals and prevented their complete demise. Thus, economists who wish to describe how rational individuals under an open-access resource will overuse that resource should turn to some other example than that of the American bison. And economists should recognize that other situations of rapid depletion of a resource do not necessarily represent the tragedy of the commons if the analysis has ignored important opportunity costs.