I'm curious, have you read VGPolyglot's and specially nemo37's posts on this topic here? If so, would you care to elaborate as to how they're like cats trying to catch their own tails?
The term makes sense, has been long used and is still used to this day in many circles. It just so happens that "libertarian" has been in large part appropriated by some sectors of the right, specially in some countries. It was not always like this, though, and the term came into usage as a term from the left - which also happened to be called socialist, but more on that later. Murray Rothbard, in his "The Betrayal of the American Right, p. 83, says: "One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, “our side,” had captured a crucial word from the enemy . . . “Libertarians” . . . had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety."
Moreover, it's kinda silly to argue anarchists, for example, would be incurring in contradiction by calling themselves libertarian just cause a right wing ideology took the term to identify themselves after the fact, specially when it could easilly be argued the term is representative of the former group in more senses then it is of the later.
Also, socialism has been identified with either state-economy dictatorships à la URSS, or with wellfare states. The former is just convinient (both for people pointing fingers at it as, back then, for the URSS themselves), while the later could realistically at most be said to have some socialist tendencies. What they both have in commom, though, is that most of the sectors which comprised (and still comprise) the left would disagree that they and they only are socialists.
Futhermore, the broader, older, definition of socialism is useful, as it shows what many ideiologies have in commom, from what we'd call Socialism today, to democratic currents which defend a people's government before "true communism" (aka a democratic socialism), to free-communists/anarcho-communists, to all other kinds of anarchists (minus ancap's, but that's another discussion). It's also still in vogue, even though a lot of stigma has been built over the term. The adjective has meaning beside the proper noum. You can be "democratic" and not like North Korea's dictatorship. There's no contradiction there.
All in all, neither the words taken separate have opposing meanings, nor the term-as-a-whole is contradictory. People do believe liberty should and can - and many would argue can only - be had in a society withouth private property/wage labour/captalism/things-of-the-like-for-example. You might disagree, but that's beside the point here. If people think like that than libertarian socialist is an apt description of their beliefs. Morevor, the term-as-is, and not the simple juxtaposition of the words, has both an history and a meaning of it's own, which also makes sense and, yes, is still alive in the world, even if fringe.
I will give you though that this usage is not current in most circles, and that in those it's bound to raise questionsd/ anor cause confusion. That by no means makes the term an oxymoron.
Sorry for typos and bad structure, by the way. I should get some sleep :p