As'salaamu alaikum, brother.
Yes, it is possible for people to worship the Prophet's grave, and this is in spite of the Dua reported in the hadith you cited. Let's look to the Qur'an for some understanding....
Firstly, the idea that every Dua offered by a Prophet is always always accepted and approved is a faulty idea. Prophet Ibraheem prayed for his mushrik father and that prayer was denied. In fact, that is one deed that Allah emphatically tells us NOT to imitate of Prophet Ibraheem's conduct.
"There is for you an excellent example in Ibraheem and those with him, when they said to their people, 'We are clear of you and of whatever you worship besides Allah. We have rejected you and there has arisen, between us and you, enmity and hatred forever -- unless you believe in Allah and Him alone'. BUT NOT WHEN IBRAHEEM SAID TO HIS FATHER, 'I WILL PRAY FOR FORGIVENESS FOR YOU, THOUGH I HAVE NO POWER TO GET ANYTHING ON YOUR BEHALF FROM ALLAH'." Surat-um-Mumtahaanah (60), ayat 4.
Notice that not only is Allah telling us not to be praying for the forgiveness of the mushrikeen, but Ibraheem himself knew that his Dua might not be accepted and approved -- "though I have no power to get anything on your behalf from Allah." Ibraheem would not have put that last part in there if he knew that his being a Prophet guaranteed the acceptance of all his Duas.
Consider also when Prophet Ibraheem made Dua for the salvation of the People of Lut, AFTER Allah had already decreed that they were to be destroyed. Allah told Ibraheem: "O' Ibraheem! SEEK NOT THIS. The decree of your Lord has gone forth. For them there comes a penalty that cannot be turned back!" Surat-ul-Hud (11), ayat 76.
Consider also when Prophet Nuh prayed for his disbelieving son who had been overwhelmed in the floor. Allah checked him about making that Dua.
"And Nuh called out to his Lord, and he said, 'My Lord! Surely my son is of my family and Your promise is true, and You are the Justest of judges!' He said, O' Nuh! He Is not of your family, for his conduct is not righteous. SO DO NOT ASK ME OF THAT WHICH YOU HAVE NO KNOWLEDGE! I GIVE YOU COUNSEL, LEST YOU ACT LIKE THE IGNORANT ONES!" Surat-ul-Hud (11), 45-46.
Prophets are only men. They are not all-knowing. Sometimes they make Duas for things that are not in harmony with the Sunnah of Allah. Perfect example: It is not the Sunnah of Allah to grant mercy and forgiveness to people who die in a state of shirk. Ibraheem's Dua would have required Allah to violate His Sunnah, (which is something that Allah will NEVER do: Qur'an 33:62), so Ibraheem's Dua had to be denied.
So we should be clear that not all Prophet's Duas are accepted and approved.
Now, we know that it is the Sunnah of Allah to allow people some choice as to their behavior, good or bad. Here's my dalil (proof/evidence) to support that assertion:
"Let there be no compulsion in religion..." Surat-ul-Baqarah (2), ayat 256.
"If it had been your Lord's Will, they would have believed -- all who are on the Earth! Will you then compel mankind, against their will, to believe?" Surat-ul-Yunus, (10), ayat 99.
Allah has given people the ability to choose to be mushriks. Of course, if they make that choice, He's not going to interfere with it, EVEN IF THEIR SHIRK TAKES THE FORM OF WORSHIPPING THE PROPHET'S GRAVE. [ Whether WE MUSLIMS should stop them ourselves is a whole other question]
Their shirk would have NOTHING whatsoever to do with the Prophet. It would be EXACTLY the same situation that Prophet Isa is going to face on the Day of Judgment with regard to his so-called followers who worshipped him and his mother. Check it out....
And behold! Allah will say, "O' Isa the son of Maryam! Did you say to men, 'Worship me and my mother in derogation of Allah's?" Isa will say, "Glory to You! I could never say what I had no right to say. Had I said such a thing You would indeed would have known it, for You knew what was in my heart, although I do not know what is in Yours. For You know in full detail all that is hidden. I never said anything to them, except what You commanded me to say, which was, 'worship Allah, my Lord and your Lord'. AND I WAS A WITNESS OVER THEM WHILE I DWELLED AMONG THEM. AFTER YOU TOOK ME AWAY, YOU WERE THE WATCHER OVER THEM, AND YOU ARE A WITNESS TO ALL THINGS. If You do punish them, they are Your slaves; if You forgive them, You are Exalted in Power, the Most Wise." Surat-ul-Ma'idah (5), ayah 116-118.
The Prophet knew that generations would come after him who would deviate from Taw'heed, even while claiming to be Muslims. I have to question the soundness of the hadith you cited brother. It might not be very trustworthy.
I hope I have answered your question for you. Maa'as'salaam, brother.