Of course it can be done. Dwarfing species has been done with everything from birds to ponies to dogs to... well, whatever. Size is a trait that can be bred for selectively like any other. I'm sure it's already being done to fish by someone, somewhere.
I don't think there is profit in it. People just take their fish back to the store when they get large, or continue keeping them in a tank that's too small. Or the fish's growth is stunted by tank conditions, or dies before reaching maturity. Look how big bala sharks and tinfoils and oscars get, look how few people have an appropriately sized tank, and yet look how many are sold in every LFS on the planet. I don't see how dwarfing them would increase sales by much.
I don't think there is profit in it. People just take their fish back to the store when they get large, or continue keeping them in a tank that's too small. Or the fish's growth is stunted by tank conditions, or dies before reaching maturity. Look how big bala sharks and tinfoils and oscars get, look how few people have an appropriately sized tank, and yet look how many are sold in every LFS on the planet. I don't see how dwarfing them would increase sales by much.