not out of line, but avis will be huge and wasteful for the same exact resolution and performance compared to other formats. Converting any format to avi would be a big mistake. If you "acquired" it already in avi and are not going to keep it long on your handset than the room it may take on you sd card for the few days may certainly be worth less than y your five minutes to set it up for recode overnight so you get the same thing with 1/4 the size.
So it is a personal mix of utility. Lets say I have 1500 movies on my WHS, with 1000 being standard format uncompressed dvd film only rips in iso and 500 720p bd compressed h264 mkvs. Lets say I personally felt that it wasn't unethical to watch rental dvds on my phone (and I don't have or advocate any view on that), then having a couple of presets to recode to the most efficient standards is highly desirable. and avi is not one of them.