I never exactly knew why he was there until this summer when I read Robertson's book. Robbie produced his album from around that time, so he was added into the mix to reflect the whole Tin Pan Alley thing. I have a soft spot for Diamond because my mom liked him back when I was a kid. That said, he's an odd fit on the bill for sure.
One of my favorite things about The Last Waltz, aside from Van Morrison's awkward leg kicks, is that Dylan is really loose in his performances, and he actually looks like he's enjoying himself on stage.