You are missing the longevity factor. If you don't ever touch your capital, your returns have to be inflation plus withdrawal, so that you have spending money that keeps up with inflation. You alsol have to deal with fluctuating returns, especially in the early years when a market fall will eat into your capital (unless you adjust your spending). 

If you are planning on spending your capital, then there is a finite amount of time before your capital is completely eroded, whereas using up part of your capital now to get higher CPP later may be worthwhile to get inflation-adjusted lifetime income