Really, how could it have been avoided? Dayton played in the First Four because they were one of the Last Four In as selected by the committee. And Dayton the city won the bid for the First Four for quite a few years.
So there was really only two choices: Either allow Dayton to play at home as they were one of the Last Four In, or over-seed them and give them a free pass to the Round of 64 just to avoid playing in Dayton. I think the committee did the right thing as being properly seeded shoud be more important, even if it means playing at home.