This is because 1) byte operations result in int (see why here: http://blogs.msdn.com/b/oldnewthing/archive/2004/03/10/87247.aspx) and 2) the following C# code

c7 -= ASC_OFFSET;

will be "magically" compiled behind the scene into

c7 = (byte)(c7 - ASC_OFFSET);

This is explicitely documented in C# specification here: http://www.ecma-international.org/publications/files/ECMA-ST/Ecma-334.pdf

14.14.2 Compound assignment:

An operation of the form x op= y is processed by applying binary operator overload resolution (§14.2.4) as if the operation was written x op y. Then,

• If the return type of the selected operator is implicitly convertible to the type of x, the operation is evaluated as x = x op y, except that x is evaluated only once.

• Otherwise, if the selected operator is a predefined operator, if the return type of the selected operator is explicitly convertible to the type of x, and if y is implicitly convertible to the type of x or the operator is a shift operator, then the operation is evaluated as x = (T)(x op y), where T is the type of x, except that x is evaluated only once.

• Otherwise, the compound assignment is invalid, and a compile-time error occurs