I vote it is absolutely wrong to give out candy.
I would also vote so, based on all of the S’varos of Akuperma earlier (which I was aware of, but he pointed them out well). However, what we do is not subject to vote, S’varos, or what we “feel” is right. We, as Torah Yidden, follow our Rabbonim and Gedolim. And it is documented that Rav Yaakov gave out candy. So as much as I might not like it, I would do so as well. To not do so would be creating my own religion. This is part of “Shviras HaMIddos”, to follow the Gedolim even when you personally think it would be better not to do so.
Now of course, everyone should ask their own Rov. And if there is a documented case of a Gadol B’davka not giving (such as Rav Moshe, Rav Ruderman, etc.), then I would feel good about not giving. But otherwise, I would just be picking and choosing what I like, and would be as guilty as those who don’t like other things about Yiddishkeit and dismiss them.
(obviously, this is different than an actual mitzva or Takonas Chazal, such as saying Shelo Asasni Isha or the type)