I'm sure it can. It doesn't appear to do so by default on the current Pi 2 B.
I just compiled the same sources on a B+ and a Pi 2 B.
B+
harry /ram $ ls -l *o
-rw-r--r-- 1 joan pi 27604 Feb 9 09:20 command.o
-rw-r--r-- 1 joan pi 2052 Feb 9 09:21 pig2vcd.o
-rw-r--r-- 1 joan pi 36144 Feb 9 09:20 pigpiod_if.o
-rw-r--r-- 1 joan pi 5792 Feb 9 09:21 pigpiod.o
-rw-r--r-- 1 joan pi 154712 Feb 9 09:20 pigpio.o
-rw-r--r-- 1 joan pi 4904 Feb 9 09:21 pigs.o
-rwxr-xr-x 1 joan pi 182052 Feb 9 09:21 x_pigpio
-rw-r--r-- 1 joan pi 32324 Feb 9 09:21 x_pigpiod_if.o
-rw-r--r-- 1 joan pi 31784 Feb 9 09:21 x_pigpio.o
harry /ram $ file command.o
command.o: ELF 32-bit LSB relocatable, ARM, EABI5 version 1 (SYSV), not stripped
harry /ram $
Pi 2 B
joan@paul /ram $ ls -l *.o
-rw-r--r-- 1 joan joan 27920 Feb 9 09:19 command.o
-rw-r--r-- 1 joan joan 2052 Feb 9 09:19 pig2vcd.o
-rw-r--r-- 1 joan joan 31932 Feb 9 09:19 pigpiod_if.o
-rw-r--r-- 1 joan joan 5780 Feb 9 09:19 pigpiod.o
-rw-r--r-- 1 joan joan 158696 Feb 9 09:19 pigpio.o
-rw-r--r-- 1 joan joan 5080 Feb 9 09:19 pigs.o
-rw-r--r-- 1 joan joan 34756 Feb 9 09:19 x_pigpiod_if.o
-rw-r--r-- 1 joan joan 34088 Feb 9 09:19 x_pigpio.o
joan@paul /ram $ file command.o
command.o: ELF 32-bit LSB relocatable, ARM, version 1 (SYSV), not stripped
joan@paul /ram $
I copied pigs and pigpiod from the Pi 2 B to the B+ and the executables appeared to run ok.
Read into that what you can.
-march=native
– Milliways Feb 09 '15 at 09:57