I completely agree with you. But also, it is childish to cancel an entire prom for a poor reason.
As for smoking, Florida has it right. Bars (at least most on the Treasure Coast as far as I know) permit smoking as long as nothing more than finger-foods are served. If people are out to eat more than they are going to drink then yeah, smoke outside. However if people are going to get drunk chances are a high percentage want to be able to have a smoke without getting up.