Dynamically created texture is off in BFE...

Hey guys, I've got a script that takes a sprite, creates a new texture to dynamically create "shadows" of the original texture by changing any non-0 alpha pixels to a "shadow" color. However, for some reason, it is set far away from its origin in Scene view.

 public static Sprite GetShadow( Sprite sprite ){

     Texture2D newTexture = new Texture2D(sprite.texture.width, sprite.texture.height, sprite.texture.format, false);

     for( int x = 0; x < newTexture.width; x++ ){
         for( int y = 0; y < newTexture.height; y++ ){
             if( sprite.texture.GetPixel(x,y).a != 0 ){
                 newTexture.SetPixel(x,y, shadowColor);
             }else{
                 newTexture.SetPixel(x,y, Color.clear);
             }
         }
     }
     newTexture.Apply();

     sprite = Sprite.Create( newTexture, sprite.rect, sprite.pivot, sprite.pixelsPerUnit );
     return sprite;
 }

what gives?