Ok, I'm going to respond here to the outpouring of advice I received, since I knowkung futab fu...
Some statements that jumped out at me: It's not exactly a "go without a date" type of dance. It's sort of like prom, you can go without a date, but it is socially less acceptable.
I'm with you about the "it's always sexual" thing. She claims she can demonstrate to me the sort of non-sexual grinding that took place. We'll see. She admitted that it is, at the very least, always suggestive.
I really didn't know I had a choice in the matter of her dancing. She asked me if I would be ok with her taking him to the Sadie Hawkins dance (Christ that school has a lot of dances), and I said yes, as much as I was ok with her taking him to this dance, and the dancing that went on. I had assumed she knew I wasn't ok with it, because I thought it had come up as an issue in the past. Apparently, she hadn't. I understand somewhat better where the defensive-ness is coming from. She thought it strange I had picked now to suddenly start caring about it.
Serp:She oddly drew the same comparison, that a tango would be more worrisome. I feel, personally, that there are reasons to tango besides the sexual element, all the steps, etc. Grinding, by contrast, has no attractive elements besides the sex and the ease of the dance. Pelvises/organs were definitely touching in this example.
Ranna:She said she would be fine with this, and my best friend actually recommended the same course of action. I find myself not wanting to. I also remember what happened the last time she told me she was ok with something I suspected she wasn't (it was bad).
xPx:It's not that I worried, just that I find it inappropriate and don't want my girlfriend doing it.
To all, I have an update, I called her today and we talked some more about it, she said she was prepared to tell whoever her date to this next dance was that that was not ok. She didn't like it, but she was prepared. I explained to her that I don't even like her going to dances with other guys at all, and I think I'm already making that and other compromises in our relationship, and so I didn't think asking her to not dance in one specific way was a large thing to ask for. She agreed. She also asked me to prom, which I declined.
Thanks for the advice, guys.