Actually, you will have lowered costs in one respect (albeit marginally) - you're hauling around 12 fewer seats, which means less weight, leading to lower fuel costs. Plus, you'll save a very slight amount on maintenance (fewer seats to break or tear). Of course, your CASM will probably still rise, as the other costs will probably outweigh these savings.
There's always going to be a distribution to your demand. You may average 120 passengers, with a given standard deviation. The smart approach would be to offer enough capacity to be able to carry all the passengers who want on except for maybe a small percent of the time (the upper tails of the demand distribution). So for example, if you average 120 passengers with a standard deviation of 20, you may want to equip your aircraft with 160 seats, so that you only turn away passengers 2.275% of the time. If you put 180 seats on with that distribution, you end up reducing this to turning away passengers only 0.135% of the time. This improvement probably only means a few lost sales, but you're saving 20 seats in weight and maintenance, which can add up over time.