The pronounciation of the city name is irrevelant to spelling. If we were going to change the way we speek becos of how words r spelt then the inglish languge wuld crumbel into seever anarkee.
This is the English language! If you think it's screwed, then don't use it! The English language is made up of multiple languages and different pronounciations from exploitation of Normans, Romans, Vikings etc. So even if the pronounciation of 'Tokyo' is wrong from the Japanese. Then we must all speak accentless because of different sounds in our accents. Okay, guys? Pokemon Kid says we can't have accents because we may pronounce things wrongs and the only way to cure this is to get rid of them or change the whole british/american and all the other countries versions of the English language!
http://dictionary.reference.com/search?q=Tokyo
http://dictionary.reference.com/search?q=Tokyou
Oh, wait, hang on. dictinary.com doesn't find Tokyou, oh guess what Because it's not spelt Tokyou. Le gasp, how shocking.
GOTTA CATCH 'EM ALL!