I agree fundamentally with your premise that the field is innapropriately named, but it seems to me that "algorithm development" is unnecessarily pigeon-holing. I think that somewhat ignores areas of study related to but not covered in "algorithm development" such as grammars, compiler construction, some of the background to graph theory (though this is admittedly more algorithmic), etc.
I submit as an alternative "computational science" or even "computational mathematics." Get rid of the noun/thing, certainly, but keep it with math and sciences, because it is. "Algorithm development" would be more appropriate for engineering or trade school. I can't be the only