No, the Sheridans should not have called off the garden party at the very last minute because someone they barely knew died. When Jose, Laura's older sister, says that Laura is being sentimental, she speaks the truth.

Sentimentality—sometimes called bathos—is false emotion, and this is what Laura is experiencing. She knows nothing about the working classes and is still feeding on a glow she experienced earlier in the day when she interacted with some workers briefly over party preparations. She decides, completely out of her head, that the the social classes are alike. This makes her feel good. When the man dies, Laura wants, based on false and overwrought feelings, to make a dramatic gesture of solidarity that affirms the humanity of the working classes—a solidarity she wants to feel but ultimately doesn't.

Of course, in reality, people don't cancel parties when people they don't know die, unless the circumstances are extraordinary. Laura, of course, is ironically showing the class difference between upper and lower (or "middle" and "working") classes in even suggesting such an extravagant gesture, as this would cause the Sheridans to throw away all the money they are spending on the party on a whim. This is something the working classes couldn't dream of doing—or expect—as they soldier on through their lives.

The complication is that class issues are glaring and do need to be addressed. The daughter is right that the working class in her culture is dehumanized and shouldn't be. It's wrong that Laura's Sheridan family can spend more on a hat than their workers probably earn in a several weeks of hard labor or that the workers live in hovels while the Sheridans carelessly throw extravagant parties with fancy pastries and hothouse flowers. However, fixing this situation calls for systemic social and economic changes that Laura can't begin to truly imagine or contemplate. As her preference for a pretty hat to solidarity with the poor shows, she's not willing to do what might need to be done—give up some small part of her own privilege and pleasure—so that the working classes can have better lives.

One can certainly see why Laura would want to call off the party. It does seem somewhat inappropriate to go ahead with such a joyous celebration given that their neighbor's just died. On the other hand, life goes on, and it's equally possible to agree with Laura's mother that it would be better for the birthday party to go ahead as planned.

Though the neighbor's death is undoubtedly sad, the Sheridans didn't really know the man all that well. Hailing from a lower-class background, he wasn't someone that the Sheridans would have mixed with on a social level. It seems strange, then, that Laura's party should be cancelled because a man they didn't know has just passed away. Indeed, one could argue that cancelling the party under such circumstances would've been insincere. It would've made the Sheridans look completely phony.

After admiring herself in the mirror while wearing her pretty party dress, Laura realizes that the show must go on. On the whole, her attitude is probably the right one. Celebrating her birthday and paying her respects to the neighbors are by no means mutually exclusive. As well as taking the opportunity to enjoy herself, she can pop by her neighbors' house later on and offer her condolences, which is precisely what she does.

This becomes one of the fundamental issues in Mansfield's short story.  On one hand, Jose's words are haunting to this point:  "She [Jose] takes a dim view of Laura's wish to cancel the garden party when she tells Laura that she 'won't bring a drunken workman back to life by being sentimental." The mother is much the same, in that she allows her daughters to plan the garden party, but does everything in her power to ensure its facilitation.  In the end, the cancellation of the party would have done little. However, I think that Mansfield is bringing out the emergence of different narratives in contrasting the garden party and the lives of the Sheridans with the reality that surrounds them.  The presence of working class people, those who lack the resouces that the Sheridans possess, as well as the idea that what was once told to be right might not actually be entirely accurate are all a part of the journey that Laura commences.  To a great extent, the reader in unclear as to where Laura stands on this issue, yet there is an  understanding that Laura has experienced something that might prompt future change as her perception of the world has been expanded.  If one believes in the ability to listen and to heed the cries of others' suffering, then one should advocate calling off the garden party, if nothing else to show solidarity with another group enduring pain.  Whether or not Laura fully understands this is one issue.  Yet, Mansfield presents this situation to the reader so that they might be able to more clearly articulate a position upon which both the Sheridans and Laura possess obscurity.