Throughout his career—but especially in The Cantos—Pound shows a great devotion to the tradition of classical art, especially when it comes to stories about gods and beauty. Further, there might be no modernist poet who's more interested in exposing us to the experience of genuine classic beauty than Pound. Now when we say "genuine classic beauty," we mean beauty in the way the ancient Greeks and Romans thought of it—something that is definitely nice to look at, but also the source of incredible hidden power and strength.
The inclusion of the Dionysius story from Ovid's Metamorphoses has Pound written all over it, not just because it's a classic story, but because Pound chooses it specifically to show how greedy, selfish men are punished and destroyed by the very beauty they try to exploit. Pound has no time for money-hungry jerks, especially when they try to make art into a commercial thing. So the Dionysius story allows Pound to give a little warning to those who would try to exploit something beautiful for selfish reasons.