I think its fine for parents to give it occasionally, but a school disco is a little less ideal, though not the end of the world.
I've just come home from ours (helper), we have fruit shoots (the dreaded), some kind of vimto squash in a bottle (only had a small number of those) and bottles of water. We also offer water and squash (not sure if it is sugar free or full sugar) in jugs for children who have no money or who have run out who are thirsty.
We also have a shedload of sweets and crisps for sale and they buy and consume their own body weight in them.
Some parents moan that we should sell fruit, but we know full well that nobody would buy it unless there were nothing else on offer.
Diet coke as a drink - lets analyse it. There is citric acid (bad for teeth - so are oranges then), aspartame (some think it is the devil, there is no real evidence for this, if you go loopy on it of course avoid it, some go loopy eating a tomato, once again, they would avoid it if so) and then phosporic acid (I think I have spelled that incorrectly, but I hope I have the name right) which is the fizzy drink thing, which apparently can leach calcium from bones (once again a small quantity from time to time would have no real effect, but regular consumption of fizzy drinks in children could make it relevant).
Oh and caffeine, in a smallish amount, compared to coffee, which isn't ideal in the evening for anyone but particularly for children.
I suspect they made it diet because of the current sugar emphasis. You could argue diet is better than full sugar (9 lumps in a can) if you are not intolerant to aspartame or don't react to it (and are sensible to ignore non evidence based claims of brain cancer).
You can of course say "no diet coke" to the organisers now you know it is there which would probably be the right thing to do on the basis that most children would tolerate it and wouldn't be harmed from it, and on the basis they have probably been consuming various other sugar products, it is damage limitation.
Our school wouldn't do it, but I can't get too het up about it.