From my view I think the reason why the Geats choose to burn the treasures is because to give some back to the dragon. Since the dragon had it first and just to respect it. Also, because Beowulf told them to burn the treasures.
Destroying and same time honoring the wealth of the king (Beowulf) is by cremating him and putting him the tower with the treasures. That mostly how the Geats honor their King ( Beowulf).
