Kirk would be a teeny tiny mo, what with being suspended and all.The impression I got was that Pike and Spock were the only proper officers aboard, so selecting a 2iC from among the cadets would have been a case of "eeny meeny miny mo".
I took it as Pike doing one last thing to try and shove Kirk into the right direction. He won't be facing repercussions about his actions if Nero's going to spear him anyway, and if by some miracle he doesn't die in the next twenty minutes it means Kirk-as-XO paid off. Pike knows Kirk's character, he knows his performance at the Academy, he makes one last grand gesture for George Kirk's boy.