I'm out of my element here (I do industrial machine design - not structural or with wood), but if you want an opinion, I'd say go with assuming it's a 5" hole.
Taking the question and assuming that it is valid to assume the length to be considered is only the length on one face (2.5" in your example) and then stretching to apply this assumption to other situations shows that it would become illogical. If you took the same hole and made it nearly parallel to the member, the issue becomes exaggerated. At 5 degrees (as opposed to 30 degrees) the variation between the length on one face and the length through the width of the member. It becomes obvious that assuming the hole can be treated the same as if it went straight through is not an accurate representation. So at the very minimum, you would need to justify that the effect is minimal for certain conditions (e.g. it's ok to assume a 2.5" hole as long as the hole is between 30-90 degrees with respect to the member)
Second argument: Consider the material taken away by cutting the hole. Assuming a 2.5" hole would mean assuming that the additional material taken away by drilling through at an angle is negligible to the analysis.
Again, I'm out of my element here, so take my opinions for what they're worth.
SirPhobos