Yes the a UFC title is a "World" title but just because you are the UFC champion that makes you the best? Is the Bellator title not a world title as well? (thats a serious question). The Olympics are the best in their country gonig up against the best of other countries with the goal of being best in the world at that said sport.
There is a reason why GSP said he wanted to compete in wrestling at the Olympics and repersent Canada, then he realized how much work and dedication it takes to get there (not saying it doesnt take hard work and dedication to be GSP...)