Why not use the same venues more than once? For example, why not let a city, like Torino, host the next Olympics also? That way they might get a better return on their investment and give the next host city more time to prepare. Is there a reason this wouldn't work, besides the possibility of the host city getting fed up with the Olympics?
To cut back now, I would think, is cutting back on their contract... and shouldn't be allowed... period.