Either or, playing unplugged and plugged in is good. Once you break the habit and learn to play softer, it's all good.
I usually ran into trouble when I wasn't aware enough (as previously mentioned) and thought I couldn't hear myself very well, so I played harder with my right hand, and soon got sore and cramped.
I did this for years, and still do if I let my attention slip.
The last couple years I've been gigging regularly with a funk band and have learned a lot. It took a super busy weekend, about 9 hours of playing in 2 days (3 shows, 3 1 hour sets each), to figure the light touch out. By the 3rd show (2nd day, 2nd show) the whole band was pretty exhausted, but somehow that relaxed, not really caring (yet still unwilling to put on a bad show) made all the difference. I knew I still had 3 hours of music to play, in a high energy funk band, so I very consciously relaxed my right hand, turned up my amp, and feathered the notes. Being consciously relaxed is the key, I think. Usually, when I get excited about playing, get in the groove, my natural tendency is to dig in and play harder. This time I forced myself to play softer, especially when I had a hard time hearing myself. Sounds counter-intuitive, but it made me hear what I was doing better, and play cleaner. And the notes were soooooo much fatter, so much more awesome. Almost like a pure sine wave at times, but then you can vary your attack and put some "hair" on the note as much as you want, for a dramatic effect. And then of course you've got about 90% more dynamics too.
Since then it's been a whole new world for me, I feel like I've reached the next "level" as a musician, so to speak. I'm re-evaluating everything as I play it now, and the band has never been tighter. I know that partly because of this light touch I'm using now I'm listening better, blending better with the band, and it just keeps snowballing into more and better things. Awareness is really the key.