I agree that a title should not be on the line if the fight is not taking place at the weight the title represents.
If I was attempting to guess why they are choosing to go ahead and put the title on the line anyway, it is likely due to the fact that it's a bout between Cotto and Pacquiao. It's the participants, they're very close to the weight in question, and the organization doesn't want to see Cotto retain the title if he loses or lose Pacquiao as their champ if he wins.
It's not for Pacquiao's sake that they are doing this. It's for the WBO's. That's my guess, anyway.