A place name is not like a chemical element. It has more functions than simply denoting a place. It has associations. Great writers may have written about it; great singers sung about it. When you adopt a new name or change the spelling, some of that association will inevitably be lost. Just imagine a company that has spent tens of billions to promote its brand, and then forgo that brand name for something else.
That said, I'm not in favor of changing Beijing back to Peking - for two reasons: Beijing is perfectly pronounceable in English and many other languages; also, Beijing has been in use for three decades and a return to the old spelling would cause more confusion.
However, I strongly support the idea that Guangzhou promotes the old spelling Canton. Unlike Beijing, Guangzhou is not exactly a household name in the West. As a matter of fact, Guangzhou officials are pondering ways to publicize the city through the Asian Games it will host soon. When the city gave up the old spelling, it threw its most valuable intangible property to the winds.
Its biggest trading event is known overseas as the Canton Fair; Cantonese food is as widespread as MacDonald's and KFC; people from Guangdong province are called Cantonese. Now, if you ask most Americans about Cantonese, they are more likely to associate the name with Hong Kong.
Standardization is important. But the purpose is to make life easier, not to rigidly apply it to everything regardless of circumstances. As good as pinyin is, it is still a rule with exceptions. For example, we have Shanxi and Shaanxi, which, should pinyin be used, would be spelt the same unless we put tone marks above the letter a. Harbin did not give way to Ha'erbin.
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