The most common reasons to take the TE off the line IRL is 1) to send him in motion, or 2) to keep him from getting hammered on the LOS when he's trying to release downfield. Also, a lot of teams will set their front based on a TE on the line. For example, some teams will set their DE outside shade of the tackle if there's no TE, but will set them up head up on the TE if he is there. Some defenses treat a TE who is off the line like he isn't there and instead line the DE outside shade of the tackle. That gives the TE a better angle to make a down block or to seal the DE inside.
As for the receivers, often times if your receiver struggles to get off of press coverage an easy fix is to line up the inside receiver on the line and the outside receiver off. That gives him a yard or two of cushion to get a free release. It also allows the outside guy to go in motion.
Those are IRL explanations but don't really apply to madden since press coverage works just as well on a dude who is not lined up on the line. Most likely it's set like that because the most common motion on the playbooks I have used have the X receiver come in motion toward the slot receiver.