There are two problems with this.
The first is that, as Strikeforce welterweight champion, Diaz's job is (first) to defend his title. Strikeforce doesn't put on enough cards a year for Diaz to defend his title a substantial number of times and fight MayheM at middleweight. Apart from the additional time that it takes to bulk up to a new weightclass and then come back down (if he was to do it right) it would take a substantial portion of time out of his schedule that he simply does not have, it would require Strikefore to basically put the entire welterweight division on hold.
The second is that this simply isn't the most interesting fight for either fighter. Strikeforce can build hype off of the fact that they hate each other and had a run in during the Nashville card, but there are definitely better fights for both Diaz and MayheM in their own weightclasses, and I doubt Strikeforce seriously wants to remind us that the Nashville event ever even happened.
I'd rather see Diaz take the third fight against Noons, and get Strikeforce to bring in a couple of substantial title contenders for him to face. Let him take the long fights and push his standup.
As for Miller there are too many fights at middleweight for him right now.
He should fight Jacaré again. He should fight Robbie Lawler. He could, conceivably, fight Cung Le or Scott Smith. That middleweight division is too interesting for Diaz to be the fight that MayheM needs next.
If the hype builds up and Diaz really doesn't have another interesting potential title fight, then maybe this should be thrown around the room, but, until then, and that's at least another year away, this fight is totally unnecessary.
I agree that from a business standpoint, it will hurt them in the long run because of the weight cutting and things of that nature.
The problem is that Diaz is still provoking Mayhem. For example, Diaz threw a water bottle at Mayhem backstage after the KJ fight. How can you do things like this and still expect to make demands? If he wants to keep playing this role, then he needs to eventually step up to the plate.
I am not really speaking from a business standpoint, I am responding to the fact that the Gracie camp keeps talking about the fight, but makes demands about a catchweight. This whole ordeal was started when Diaz made the decision to attack Miller.