The boxing titles are at least lineage-based like pro wrestling titles, but they're different because the sport is actually real (*cough*). Although even then I'd say that sometimes it does cheapen things. When someone retires as Champion, it weakens the next Champion's argument that they are the best in the world at their weight class, when there was someone else already established as such that they never beat.
In pro wrestling, I would argue that no Championship has ever been strengthened by a vacancy, and in the vast, vast majority of cases, vacancy weakened the title. Sure, a title tournament culminating at Backlash 2000 might have been a fun time, but then when Rock wins, it cheapens the value of his reign since he never beat Foley for it, so then we don't truly (in kayfabe) know if he's BETTER than Foley and thus the best wrestler in the world.
Except in wrestling and sometimes boxing, titles do change hands and you might be the best one night and not the best another night. Rock and Mick Foley exchanged the title. Rock and HHH exchanged the title. Keep in mind that some of the best boxing matches in history were series between two guys where each of them won a bout.
You can't really argue about how it would tarnish the title, especially when heels retain the title via cheating. I mean, does anyone think less of the title when JBL was escaping time and time with questionable victories? Was JBL the best wrestler in the world while he held the title, or was he simply the best at keeping the title?
Rock has victories over Mick. Mick has victories over Rock. The title is never about being the best in the world and always about who's better that night. And that's how it is in the WWF/E because it's the only way that makes sense. It's why guys cheat. It's why guys weasel their way in and out of victories. The Miz was never the best in the world, but he was damn good at making sure he didn't lose his championship.
I'd go with you on the whole "tarnish the championship" thing if every WWF/E match was a clean, competitive bout where the better man won. But it's not. Therefore, I don't see why a vacancy by Foley would do ANYTHING to tarnish the belt. On the flip side, you get an absolutely great moment for Foley that I'd remember for years to come.
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TheRock ~ Slow dramatic zoom-pan. Doesn't phase the hooded man.
"You have issues." - MWC. Pot. Kettle.