My experience is different, the only people I've ever heard use "Sweetie," besides towards children, is older men being condescending towards younger women, making sure they know their place, and older men who use it towards younger women as a term of endearment unaware that it's usually used in a condescending manner. I've literally never heard an woman say it outside of speaking to children, however, I think it might be acceptable to use in the American South, at least stereotypically, I've only spent a few days in the South myself.

That being said, I believe this particular use was intended to be ironic/sarcastic. Though it ends up being just a distraction.