Stanford does the same thing on their app, only in theirs you've only got two lines to name your books. Since CMU has given you 500 characters, I'd take the chance to add a short description of why you liked each book-- that's what I'm doing, since I'm planning to be a Creative Writing major.
My private counselor said that in most cases of this question, they want to see what you're really interested in outside of your English class. If you put "Catcher in the Rye" and "East of Eden" and "Lord of the Flies" and all those atypical English class novels, it's not -bad,- but it doesn't show any depth of your character. If you read science fiction, mention all the good sci-fi books you read. If you like Harry Potter, mention that. If you like cheesy romance, name your favourites. Don't just throw out famous titles to impress.
My guess is that it's optional because of all the tech types who have zero interest in reading whatsoever. But if you read, even a little, take the chance to write about it. It can only help you.