While the Markdown parser on webkit.org will properly handle hard line breaks, the WordPress autop() function interferes with this capability. We need to investigate the effects of disabling wpautop() on other content or decide to dynamically disable it when Markdown is used.
My investigation shows that yes, we will be able to remove wpautop and allow the Markdown parser to handle the paragraphs. wpautop() reformats at runtime when the post is delivered to the client. The Markdown parser runs after saving updates to a post and keeps the generated HTML markup in the database. Making the change to disable wpautop() and enable paragraphs in the Markdown parser will require reprocessing all of the content in posts and pages through the Markdown parser in the database.