Of course he would display it. It is a show of his arrogance. It's says to everyone, hey look, I not only fooled Dumbledor, I had him help me stay immortal. Plus, if you think about from JKR's point, as far as the story goes, why was the award kept, if people knew Tom Riddle was Voldemort. Dumledore knew, and I am sure other must have known. The identiy of a mass murderer is not something you keep to yourself if he is loose. So, why would Hogwarts keep and display the trophy of such an evil person? Especialy after it was revieled that he was given the award as a result of framing Hagrid? Why else would she(JK) have left it in the school? Not to mention the way it was so casually talked about in COS and HBP, like so many of the other things we skip over and then say "how did I miss that?".

JKR has a knack for showing us all the clues we need, to figure out the pluzzle, and hide them so well. Maybe it's just me, but I know I have skimmed over most of the clues she leaves, and don't see the pieces fall together till she puts the last one in place. It is only now, in HBP, that I have been able to guess where she is going, and that is only about 80% of the time in this book. I think she has done a wonderful job of making so many pieces from all 6 books tie in together, with almost no, if any, contradictions. Even the small mistakes she does leave, can be written off as just not having been explained in the book (like not saying when he got his cloak or the maruders map back). All of the pieces of the puzzle point to the award.