Diantha is the CHAMPION and in the Pokémon world champions are the strongest untouchable trainers, I don't see how is she a "mary sue", Ash simply is not even close to her level, it's strange this particular complain about "mary-sues" always floats again.
It's just a buzzword.
As the episode itself. It was pretty great. Great interactions all around, Serena and Bonnie for cakes, Serena sass-on Ash, Clemont's invention actually working and with freaking lasers to boo. The anime definitely fleshed out Diantha's character, though her running with those short shorts was bloody ridiculous, still though her little quirks like winking and "checkmate" were quite cute. And her flashback with her relationship with Gardevoir was great. Speaking of cute, damn son, this Sycamore is one smooth muthafakka, and that aide is hella cute, and her slap on Sycamore coming on to her was great. In fact, these COTDs are really getting cute these days.
Battles, well Ash was going to lose to Diantha obviously, though she is impressed by his bond with Pikachu, which I hope is foreshadowing for Ash eventually getting a Mega Stone. Speaking of which, this episode really hype the hell out of me for Mega Evolutions, great opener for this "Mega Arc" and I can't wait for the next episode.
I have no illusions of Ash legitimately battling Diantha like the man with the Absol did, but man, did it burn the cooled coals of fire back up bright and hot.