My priest has been disc since level 10 and leveled solely through dungeons and it's been a blast. At 40 I dual-specced her disc/shadow and used shadow for questing while waiting for dungeon queues, but her OS is now holy to try that side of healing.
I definitely like disc best, penance is by far my favorite priest spell (it's SO fun, too!) and I was ecstatic to finally get it. I really think it just depends on your own playstyle; I don't think holy or disc are better or worse than the other.. I just personally prefer disc. She's level 68 now and at 80 her MS will definitely be disc all the way.
As a disc I do enjoy the fact that if I have a crappy tank I can Fade and put shield on whoever keeps pulling aggro. If it happens to be a caster class the shield will usually hold long enough for them to get off a couple of spells without the pushback. With shield I can also dps for a bit in between shields/heals as long as I'm above 50% mana so I don't have to worry too much about drinking between pulls. I will say that if you don't choose to dps between heals/shields as disc it is a little boring. Shield, go walk your dog, come back, shield, go watch your favorite sitcom, come back...etc.
Since this is nowhere near my first toon I had plenty of cash to dual spec so I do queue as dps and heals. I have a shadow spec (now that I'm level 50) but the thing that kinda sucks about priest dps is you can't do any aoe until level 75. So I basically have to tab target VT or Mind Flay or SW:P or a combination depending on how much health the mobs have and whether I have good dps or rotten dps with me. It does at least keep you occupied instead of hitting one button (volley, rain of fire, blizzard, etc) so it is a bit more exciting than those classes.
Stayed holy from 1-73, all in the dungeon finder, still holy actually, but tired of going oom, thinking of switching. From levels 15-55, I was holy, and queued as dps and heals. Most of the time, I got in as dps, I guess the dps pool is lacking in my battlegroup, whatever. If we got more than 3 mobs, I'd basically spam holy nova (zero threat!). With 3 points in spirit tap, I'd get a TON of mana back. I wasn't always at the top of the charts, but I was competitive. In one ST run, where I was queued as dps, I had most healing done, highest dps, and most damage done, as a holy priest. However, at around lvl 58-ish, The deep holy build started really hurting the dps so I quit using it for damage.
My armory link is below. Did I just have a shit group (low dps and bad tank) combined with lag or is my gear off? strategy? I figured at 70 I would have no trouble healing the basic WoLTK instances.
Did you actually inspect the DK for gear, enchants, gems, spec, and professions? If not it's entirely possible that he was in a DPS spec with sub-par gear and didn't know how to use his cool downs. Unfortunately a lot of classes that are allowed to queue as tanks abuse the system even when they don't have an appropriate spec or gear for tanking. I tanked UK for the first time at level 68 on my paladin and while I did take more damage than at level 70 or 71 it was certainly easily manageable by the disc priest that was healing me. But I was also full Prot spec with gemmed and enchanted tanking gear and a couple of BoA items. Sounds like you just had a bad tank.