If his parents, for whatever reason, have decided he should not have a graduation party, I think you have to respect that. Even if you think the reason is silly, whatever it is, I think parents need to be allowed to parent without other well meaning relatives undermining their parenting decisions.
Now, does that mean you can't acknowledge and celebrate your nephew's accomplishment? Of course not! My advice would be: Go for the ceremony and take him out to dinner while you're up there. Try not to get in the middle of whatever is going on between him and his parents. There is no way you will make it better, and may very well make it worse.
Hope this helps,
T.