I think the main reason for Dana's objections is that he doesn't consider GSP a MW. I heard him on many occasions talking about how GSP isn't even a big WW. And, if you compare him to Alves, Rumble, even Hardy...he is right. Even though, GSP is very lean and has almost no fat on him.
And please take this in consideration. Almost all the fighters at MW are bigger than him, they are cutting from well over 200 lbs (210 even). I am absolutely confident GSP would dominate almost everyone at MW, because of his insane wrestling.
Another reason is, GSP still has some good fights at WW, some rematches that could be interesting: Fitch, Alves, Kos.
And i think Dana is still dreaming about GSP-Penn 3.
But, in the end, maybe Dana has some secret plans. (Jake Shields?!?!