Waterhouse liked to do pretty, and, like a lot of his paintings, the theme is just an excuse for that. Which is just fine, nothing wrong with pretty.
But he is a little unfair to Diogenes, who was a great deal more than just an grumpy old misery, making important points with his philosophy, being a philanthropist, ( he was quite rich, ) and used his mockery justly against the pompus and shallow.