You have several issues -

1) Different airline types require different pilot certifications. So if you switch, say, a 737, with a 757, you have to switch pilots as well. Switching pilots is more problematic than simply switching airplanes as eventually the pilot has to end up at "home" and also the pilot can't fly over a certain amount per day or month. So you can't switch a pilot dynamically from IAH-SAN to an IAH-MCI routing with the plane.

If you ran an airline with a single type (like Southwest does), you could potentially fly pilots on a fixed schedule and dynamically allocate the actual aircraft since it doesn't really matter to the pilot if they are flying a 737-500 or a 737-800.

2) A single aircraft change affects multiple flights. Let's say a particular schedule calls for a flying BNA-IAH-BNA round-trips all day long (stuff like this happens with
hub-and-spoke airlines). In this simplest case, if I remove 40 seats from IAH-BNA to give to another route, I also have removed 40 seats from the subsequent BNA-IAH flight.

In the case of Southwest, it's potentially much worse. They might have an aircraft flying PVD-BWI-MDW-MCI-OKC-MSY and then on to who knows where. Switching a plane in this case, would make it very difficult to get back to the right size of plane later. Hub-and-spoke model better allows for getting back to the expected state.

3) Big differences in seating requires changed in flight attendant staffing. I switch from 125 seats to 175 seats and I need another FA. Like pilots, I can't simply keep the FA's with the aircraft because than the people won't end up in the right place, or they end up working too many or too few hours.

4) Seating assignments - you basically couldn't pre-assign anything in the back of the plane or risk re-assigning these seats later. Of course airlines already don't pre-assign all seats, so this wouldn't necessarily be a huge problem.

I think this could be done if your airline was single aircraft type (let's say RJ-50, RJ-70, RJ-90 or a variety of different 737 models), but you would make the changes before the day of the flight. So if sales were particularly good on IAH-BNA (perhaps a convention is in BNA or a Titans-Texans football game) two weeks ahead of the flight, you switch that plane with a larger plane from a routing that is getting lower than expected passengers. You would tend to lose some of the high-yield "must buy the last ticket on the plane" market because your planes would tend to always be less than full, but you would have an overall higher load factor as you turn fewer purchasers away.

If you made the changes multiple days in advance, it could all be made seamless to everyone involved (airport, staff, catering, passengers).

Definitely would be an interesting computer program to optimize this.