Depends if that was secondary or primary education.
If it's secondary, that's pretty normal. There are over 1500 kids in DS's school. They'd be there for months if they all took part in sports day. But they do, I suppose you'd call it, elimination heats in the summer term. So everyone does 100m in PE, then hurdles, then javelin etc. The best one or two from each class in each sport are included in sports day. The rest sit on the field, cheering their classmates on (or having a chat then finally realising the classmate is running if I know my school days). So it's the sporty vs the sporty.
In a primary school I wouldn't think it was so common because the schools are smaller. Allowing an opt out with kids who see things as very black and white doesn't always work. Because, let's just say you have George, Emily, Amy and Zak running. The others have opted out because they don't want to be last or hate sports or just want to sit with their mates or it's too hot. Plus they know these four are the fastest - they've been in PE lessons with them all year. That's this year. Zak comes last. Next year he opts out because he doesn't like to be last. If that carries on eventually, George, who loves sport because it is the only thing he's good at, won't get a chance to shine because everyone has opted out or so few are taking part it's pointless. Meanwhile, Emily, who's great at maths, gets her tests back with 10 out of 10, Zak gets a star for English, Amy who's good at singing, gets a solo in the school play. Now George sees himself as a failure.
I do agree that the yearly parade in front of parents is pointless. I was happy to see the certificate my, non-sporty, DS got for maths or writing a story. I didn't have to watch him do it. Maybe it would be better to do similar to secondary schools and have play-off heats in PE through the summer term, give points to the fastest, best thrower or whatever and give out a medal or certificate to the top three or four in each year. It becomes less of a big thing for those who aren't sporty but still allows the sporty to get their 10 out of 10 or gold star like the academic kids.
Secondary schools don't usually invite parents - 1500 kids is enough to find room for on the playing field! And I don't know many parents who get sad at not being invited to those sports days!