Yes they can and yes they do. This doesn't mean they will always do it (I'm sure we have all been on light load aircraft before) but I am positive that from time to time they will cancel a flight with a light load as long as certain criteria are met. And again this doesn't mean that they will always do this.

This happened to me last December while flying from SJC to PHL with a change of planes in Denver. When I dropped off my bag at SJC the counter person looked at my reservation and said, "wow, looks like you are gonna have a plane to yourself on the Denver to Philly segment." I asked what the load was and was told 31 on a plane that holds 177 or so. Immediately I worried that the flight would get canceled.

Sure enough, as soon as I arrive in Denver I'm notified that the DEN-PHL flight has been canceled due to weather in Philadelphia. Problem is, there was no bad weather in Philly that night, (43, some drizzle, good visibility). No other flight into PHL (including several from Southwest) was canceled. Only my lightly loaded flight. I was pretty livid since there were no other flights at that hour and as the airline was claiming weather they did not have to provide a hotel. I argued and argued with the supervisor at DEN who even assured me that there hadn't been any plane swap or other delay and even agreed that it seemed odd that my flight happened to be the ONLY cancellation into PHL that evening. The plane I was to be on was just sitting, empty at the gate.

So yeah, the airline will deny deny deny that they ever do this, but I am positive it happens from time to time. As for possibly needing the aircraft in PHL for the next day, it so happened that this plane was scheduled to return to DEN in the morning so Southwest had no problem cancelling that flight as well and the plane was already where it needed to be. The morning passengers could be easily re-accommodated.