I loved trick or treating when I was a child and if it had been denied and I was forced to go to a party instead, I would have been very disappointed. Even though my children are all grown, I love seeing all the excited little ones in their costumes that come to my door.
One of the reasons parties became more popular is because the media started a paranoia epidemic in the eighties. Its interesting to note, and I have researched the facts, that not one razor blade has ever been found in a piece of candie, and there has only been one recorded poisoning, and that was by a family member.
I say, use common sense as far as the neighborhood that you take them to, and if they prefer trick or treating, let them enjoy the true Halloween tradition.