When IOS started supporting dynamic allocation of IPCP (IP over PPP) addresses, it also got the mechanism to insert a dynamic host route toward the neighbor's IP address once the IP addresses were negotiated. This mechanism makes perfect sense in dynamic address allocation environments, as the subnet mask is not negotiated with IPCP. Without a host route toward the other end of the PPP link, there would be no easy way to reach the IP prefixes reachable via the PPP link. However, the PPP code got way too aggressive in the recent IOS releases. For example, in the 12.4T train, you get a connected host route toward the IP address of the PPP peer even on a leased line where both addresses are in the same IP subnet. Here's a sample printout from my lab router that illustrates this behavior:

R1#show run interface serial 1/0
Current configuration : 107 bytes
!
interface Serial1/0
 ip address 10.1.0.1 255.255.255.252
 encapsulation ppp
 serial restart-delay 0
end
 
R1#show ip route 10.1.0.0 255.255.255.252 longer | begin Gateway
Gateway of last resort is not set
 
     10.0.0.0/8 is variably subnetted, 4 subnets, 2 masks
C       10.1.0.2/32 is directly connected, Serial1/0
C       10.1.0.0/30 is directly connected, Serial1/0

To disable the automatic insertion of the connected host route, use the no peer neighbor-route interface configuration command.

You have to clear the IP routing table or flap the interface to remove the PPP-generated host route