In liqour that is at cask strength (usually over 95-100 proof) the alcohol burn overpowers the flavors in the drink. Adding water to liquor is like adding salt to food in that you can always add more, but once added, you can't take it out. Cask strength liquor is easy to dilute to a reasonable drinking strength. Different people prefer different strengths, so starting at cask strength allows more options to more people.
Liquor that is too cold, also makes it harder to smell and taste the underlying flavors and scents. So my preference is starting with cask strength, then adding enough water to dilute it to drinkable strength, and having it cold, but not damned near frozen. Some people store tequila, gin, vodka in their freezer, and while OK for mixed drinks, it isn't good for sipping liquor.
French oak aged plum or berry brandy at 120 proof makes for a very nice sipping drink when it gets diluted down to around 90-95 proof.