But is the rationale and reason for doing it what makes it cruel or not cruel?
That depends upon your definition of cruelty. If causing suffering is considered cruel then reason and rationale is irrelevant. If desiring to cause suffering is what makes something cruel, then it entirely comes down to reason and rationale. I don't think the word is specific enough to only cover one of those, leading to a lot of confusion in discussions.
From the animal's perspective, their purpose for having been bred is not a factor in the ending of their lives
The animals have no perspective. While they're often intelligent sapient creatures, they lack the abstract reasoning to fear the concept of death or ability to anticipate the thought processes of others to understand our motives. While some animals may be capable of this (cetaceans, elephants, primates and corvids being the most likely) none of our domesticated traditional food breeds can.
From our perspective as humans, the reason for breeding them has the consequence of making us feel less guilty.
Yep. That's why we do it that way. We're very category-based thinkers. Slap a mental label of "livestock" on cattle and it becomes okay to kill them, when relatively similar horses are generally excluded from eating in western society.
I think the fact that we feel such pity and compassion for prey type animals, has more to do with our separation from the hunting and butchering side of food preparation. If it were not for that, we would be forced to kill and butcher those animals ourselves and learn to not feel guilty about it.
People will always find a way to adapt to their situation to be able to do what they need to. I think it's how we got to our current system. People want to eat meat but are capable of feeling empathy towards animals. So we label some breeds as okay to eat and grow them for that purpose.