There is nothing wrong with calling someone, especially a family member, by a 'pet' or short form of their name. My real name has several possible shortenings. It's as though my name is Elizabeth, and I have been variously known as Liz, Beth, Betty etc. Doesn't bother me at all and I quite enjoy taking on a 'different identity' when I meet a new group of people.
I think parents who make a big fuss about this are being a bit precious. As long as its a short form of the actual name (and the child doesn't hate it) I don't see what the problem is. It's not malicious, but affectionate and normal. Jake is nicer than Jacob, anyway.