Oh really then? You don't say locking our Earth's animals up and and torturing them like that disgusting? If you think about it, we're just as messed up.
This is the same as keeping a dog in a backyard - the Pokémon have been said to go to a "Pokémon Registry System". They are also transformed into energy (as seen by them turning red when being returned) so we can assume safely that if they don't have a registry to store the Pokémon in, that the Pokémon aren't stuffed into there, and are decently comfortable. Sure, they may have the Stockholm syndrome, but they're happy nonetheless - and if they aren't, we aren't one to talk, as we do the same thing, though to our animals, just with the difference that we don't turn them into massless energy.
Besides, it's been revealed to us many times that they love and want to battle (Oshawott, for example, comes out of its Pokéball to fight in battles it's not called to fight in), and that they enjoy staying in their Pokéballs more (as revealed by Ash to Sceptile). It may all be the Stockholm syndrome yes - but what can we say to defend our morality? A Pokémon battle is not a dogfight/cockfight/animal fight - they enjoy doing it, and the trainers create bonds with their Pokémon throughout the process. If anything, it resembles our sport of wrestling. It is a sport, not a stupid betting game.
If you know anything about how dogfights work, you know that there is not a good bond between dog and trainer, both ways. The dog most likely will try to attack the trainer, and the trainer will beat and malnourish the dog, as was the case with every dogfight ring busting. The dogs had moldy water, they hadn't had food in a very long time. But it's not because the trainers couldn't afford it - most of them were prestigious and had more than enough money to waste on these dogs.
However, when we look at Pokémon battles, we see a deeper bond - take Ash and Pikachu, for example - they are friends. They do not expect things in return - they are doing it to grow stronger and to improve each other. When a trainer eats, his Pokémon eat. When a trainer starves, his Pokémon starve along with him. He will try to take care of them, and they will try to take care of him.
Sure, there are trainers who mistreat their Pokémon, but if everyone was to be perfect, that - no, any - world would be boring.