Interrupt workshop for Daily?

While it is true the DS has to happen at the same time (and place) on a regular basis, I don't interpret the Scrum Guide ("The Daily Scrum is held at the same time and place each day to reduce complexity.") as an absolute requirement.

If, for the benefit of the product, it makes more sense (aka it's more valuable) to continue the workshop rather than have the DS, then the team should decide accordingly, and people not participating in the workshop should be informed as soon as this is decided so an ad hoc solution is found.

With a proactive mindset though, this scenario should be avoided in the future, to keep a smooth process in place. But, again, if it happens every once in a while (for various reasons), I don't think it's such a big deal: have the team decide what's more valuable in order to prevent waste.

Just as we typically don't have a Daily Scrum on the weekends, we don't typically have a Daily Scrum on holidays - these non-working days are built in to a Development Team's plan. The same could be said for an all-day workshop. That doesn't mean there won't be pressing reasons to have a Daily Scrum (sometimes people work overtime on the weekends) - but at that time, if the Daily Scrum seems more important than the workshop, then I think the team will be able to reach an agreement anyway.

Our Scrum Master has the opinion that it's more important that all members participate at the Daily and the workshop should have a break for that.

Would this have improved the quality of the team's plan for the next 24 hours?

I really think that @Ian summed up all of the other posts in one simple question. (And I am jealous that he can do that.)  It really boils down to whether the Daily Scrum was needed by the Development Team in order to plan the next 24 hours.  I am going to make an assumption that in the previous day's Scrum, everyone acknowledged they would be attending the workshop the next day. Again my assumption would be that based on the workshop everyone in the Scrum would have discussed what they plan to do the day after the workshop in anticipation of not interrupting the workshop to hold a Daily Scrum.

Neither you or the Scrum Master are wrong.  But remember that the Daily Scrum is for the Development Team and no one else.  So neither of you really have any say in whether the Daily Scrum should have occurred.  That decision is entirely up to the Development Team. 

If a team came to me, here's how I'd approach this.

Is anyone on the Development Team not in the workshop? If you have at least two members of the Development Team not in the workshop, it may be a good idea for those people to get together, review, and replan. If you only have one person, then there's no real point for the event.

For the people attending the workshop, I'd encourage them to focus on the workshop. I would not expect them to contribute toward the Sprint goal for the duration of the workshop. If the workshop was in the middle of the Sprint, I'd encourage them to make sure their work was in a good place and understood by someone not attending the workshop in case there were questions or concerns (unless the whole Development Team was at the workshop, of course).

Leading up to a workshop, I'd want to make sure that stuff around it was accounted for when capacity was considered during Sprint Planning. That is, any kind of wrap up or extra coordination before the workshop day, the lack of availability during the workshop so focus can be maintained on the workshop for the attendees, and any kind of knowledge transfer to the rest of the team (or other teams) following the workshop. These are the same things (except for the knowledge transfer) that you would consider for any kind of planned absence.

At the end of the day, I'd want the Development Team to figure out what works for them and I'd make sure it's talked about at the retrospective. This way, the next time there's a workshop or planned absence, we know if the way we handled it worked or not.