Yes, it is possible. For instance, if one day merged mining becomes totally worthless, the PPS ratio would certainly have to go below 100% (and probably below 99%, because you have to account for orphaned blocks etc.).

When you say "dual mine" I think of those ASICs that (like Gridseeds) can mine two different algorithms at once. But I suppose that you're actually thinking of a system that replaces Litecoin with something else if it deems it more profitable. That's exactly what profit-switching pools do, but, as its name suggests, LitecoinPool.org is a Litecoin pool, not a profit-switching pool.