There's no doubt that airlines will cancel and consolidate flights when the planes are not going to be full enough to suit them. (Though they seem to want to disguise this as "mechanical," "weather," or other problem; they never seem to admit openly that "it won't be economic for us to operate a half-empty flight." Why don't they just say it?)
But what about the original question of whether the published schedule is simply impossible to execute, given the staff, equipment, gates/slots, and whatever other resources are needed?
Also, the "compensation" idea was not merely suggested as a "band-aid," but as something that might provide incentive for airlines to improve. And it should be remembered that the airlines are an "oligopoly," and in some markets, close to a monopoly. They wield enormous power vis-a-vis the customer. Some of the litigiousness of our society may be a reflection of our collective frustration at the power of huge corporations and our seeming helplessness to get decent treatment from them.
Kathy
(To yyz-den: Apology accepted.)