I always use a set list, but I'm not afraid to call an audible, either. However, a well-designed set list shouldn't really need many audibles. You have to be aware of instrument changes, capo changes, different tunings, songs that somebody just can't sing right after certain other songs, etc. just to avoid a trainwreck. No guarantee that the audibled song is going to work any better than what's next on the list would have, either.
I prefer to have certain places where a song (or even more than 1) may get skipped. The call is then, "skip!", & everybody knows to play the next song in the list.
I know several people who think they are "masters" at "reading the crowd". Not a single one of them is actually correct.
Personally, I believe that we, as musicians, should be leading the crowd, not vice versa. We are the tour guides here. We know where to go, how to get there, & what cool things there are to see on the way. That's our job. We're trained professionals. Don't try this at home.