To Rebyidd: Giving in to vandalism might not be right. But being neighborly in a pluralistic nation that generally respects Jews is right.
The alternative is to give out a pamphlet explaining why, halachically, you cannot participate in a non-Jewish religious festival, which will confuse most trick-or-treaters because they are not aware of their participation in any religious festival. Have you thought of giving out chocolate-covered kreplach?