I have kicked around this theory over the past few weeks, but now I have more concrete evidence to support it. Also, there are many secondary theories that can spin off, but I just wanted to address the basic theory.
I believe that Kate's name was crossed off by MIB. He did this as part of a long con on Sawyer. Or better stated, as leverage over Sawyer.
Kate's name was not crossed out at the Lighthouse. Also, why are names crossed out before people are dead? It makes no sense. I see people speculating that Kate was crossed out because she broke a rule (taking Aaron off island). I disagree. Kate's name has not yet been crossed out officially.
The evidence comes from Widmore. When he says that Kate's name is not on the list, he does so to get Sawyer to drop the gun. Sawyer even says, "He doesn't need you." All of this stems from the idea that Kate's been crossed out. Something that Sawyer has seen first hand. But not at the lighthouse, and she isn't dead. Hell, even Sayid wasn't crossed out even though he "died." I'm sure Sayid broke a a rule-or-two after being "claimed."
Well, why (or how) does Widmore have this list? Either he really is working with MIB or he (or one of his men) visited the cave and wrote down the remaining names. Widmore might even be fooled as well.
Another thought, is that Jacob crossed it out in the cave to trick MIB into killing a candidate. But that's not why I'm writing this.
My point is, although I think Kate has no business being a candidate, she most probably was and still is. Do you think MIB was conning Sawyer into submission with the threat of killing Kate?