What the students choose to do is their decision. However, for some reason I sense you have a problem with a church choosing not to enable their behavior by having a school sponsored prom? If you would read the first letter on the website, drunk seniors got in a fight with a wedding party which made the school liable.
If they're going go wild get drunk, waste mommy and daddy's money, fine, let the little rugrats have at it. The pastor however has made a wise decision (and a Christian one) not to be associated with it
no problem....
but acting as if they are big cheese or something because they are cancelling an event when the students probably don't care one way or the other is quite another.
I got the sense of "if we cancel the dance, then they won't do bad things" out of this story, which is completely stupid.