That only works if it's a local printer: when the CUPS server is on a remote server, it reads the name from the server and overwrites any local changes you make.
I found that the same behavior exists for local CUPS printers, however. I went to
http://localhost:631/admin and created a printer, using the same specs as on the server:
Name: dw090
Location: Outside room 136
Description: HP Laserjet 5600
Once added, the printer name in the Print & Fax dialog box is "HP Laserjet 5600", not "dw090" as it should be/as I would like it to be/as it was in 10.4.