All through this thread, I've been thinking that, to me, it would be worse to find out after the fact that people didn't want to hang out with me but were too "nice" to say so. If you know a particular group of people doesn't want to include you (and there are so many reasons why they wouldn't), then you can go look for another group to attach to. If you don't know that people don't want you around, and you start to build up the idea that you belong in this group, that these are good friends of yours, etc, and then you find out later that nobody was really comfortable with you being around, and no one said anything, that's just devastating.
When it happened to me, it really made me question whether I was "worthy" of being anyone's friend at all. I still have problems with this tendency, and it's been a good 12-15 years since the incident that caused me to doubt myself initially.
I think the OP's DD did a good thing in letting AG know before prom that she wasn't part of the group, and it was done in a very nice way - just a statement of facts, with no judgement implied.