In Chapter 8, Watson reproduces the letter he wrote to Holmes. Why does he do that?

Right at the beginning of this chapter, Dr. Watson gives his reason for why he is reproducing this letter that he wrote to Holmes.  He says that he is doing it because it will be a better record of what happened.  He wrote it right when the stuff was happening and so it will be more accurate than later memories.

If you are asking why the author chooses to have Watson do this, I would say it is to drag out the suspense of the story.  If Holmes were at Baskerville Hall, he would surely be able to figure out the mystery quite quickly.  By having Watson just reporting the facts, Doyle lets us try to figure the mystery out for ourselves and he makes it last longer.