In my circumstance its the ability to create a duchy with no provices in the listing (the de jure has the said provinces associated). Since I'm king of that region I was offered the option but wouldn't that be something the holder of the territory would be offered and not the liege who might not have any of its holdings? It just seems odd to have a title to a de jure region without actually having any holdings from it in my name.
Ah, I see. If your vassal(s) hold the de jure territory of a duchy/kingdom, you can create the duchy as well. After all, following the principle of feudalism, you are granting them your land for them to rule, so to speak. It may be useful to create these duchies, even if you don't own the lands directly, since after creating the duchy you are in charge of handing it to whoever you like best - that is in game terms whoever likes you best. The advantage of this would be that you will from that point on only have to deal with that specific vassal. Imagine the duchy consists of three counties, each count being your vassal. Two of them despise you, but one count loves you. You make him the duke so that from now on the other two counts are his problem to deal with. They won't be able to join any factions in your kingdom and also won't prevent you from changing inheritance laws.
Another advantage is that you prevent "super dukes" by spreading duchies amongst your vassals. If one single person amasses a lot of titles, he will probably become dangerous to you in some way. Try to make sure nobody holds more than one duchy (except maybe if he is your heir).
If you want to, you can also give duchies to somebody who has no connection to that territory whatsoever. It will most likely cause friction between him and the counts he now is the ruler of. But I tend to try and keep the de facto duchies as close to the de jure duchies to avoid internal wars as much as possible.
You should be aware of the fact that any count within a de jure duchy you hold will have a -20 opinion modifier towards you since he desires your title. Conversely, if somebody holds a duchy and you control a county within it, he wil have a -25 opinion modifier towards you. Granting somebody a duchy will improve his/her relation towards you by +60 (I think).
Finally, as a king/emperor your vassals will dislike you (-10 for every duchy held) if you have more than two duchies to your name. At that point I would advise to spread the wealth a bit.
Long story short: It comes down to whether you want to deal with many small vassals or fewer, more potent ones. In my opinion there is no "right" or "wrong" way to handle it, it depends on the situation and the way you feel more comfortable.
