If your unit has 10 vision range and your city has 5 vision range, your unit when standing on your city will provide you with the full 10 vision range, but somehow as he garrisons the city he becomes shortsighted.

This doesn't make much sense nor does it seem like a good idea for gameplay reasons, why would you encourage players to ungarrison their units and leave them sitting on top of their city? It adds needless micromanagement.

From a purely gameplay perspective, garrisoned units simply exist as reserves that are stockpiled in the city. They don't actually do anything like stand watch on the walls. 

Would be neat if they did.

It's probably a design decision. There are watchtowers to provide vision of a region to offset this. But I'd 100% appreciate a new / or modified tech for this. Maybe one that also provides a small security bonus. Or maybe a few of the military buildings could also have a vision boost. I always get a little grumpy if I have a long protracted war with an AI, the inability to "place" a watchtower I want to build frustrates me.