Can an airline reject a passenger for being overweight?
Yes.  If carriage of said person on a particular flight would cause the aircraft to be overloaded or outside of its CG envelope, the airline has full right to refuse them passage for safety reasons. It would be illegal under Part 121 and Part 135 to do otherwise.

Practically speaking though, most large commercial aircraft have such great payloads that this would not happen on a frequent basis.  Now the airlines may charge said person for an additional seat costs because of their size and girth.