Hehe. I agree that it isn't cute, cool, or unique, or spunky or strong or whatever - but I think you have to admit that the annoyance and confusion is caused by the annoyed and confused, rather than by the naming practice.
I think
Theo sounds sort of effeminate on a boy anyway so, although in general I share your exasperation, in this case I'm sort of enthused. As long as it's short for
Theodora or some other name that actually has
Theo in it.