I don't think you are being unreasonable Meercat.
If I have read right the dog in question nearly killed a dog it lives with, over a plate of food.
That to me shows a bit too much aggression. Yes it wasn't directed at a human, but if you talk with a dog instructor most will point out dogs generally don't see kids as the masters but as equals or less than equal to the dog.

So while the dog may never be aggressive to your parents or you (who are higher in the pecking order)
if it gets frustrated or sees the kids with food it might get aggressive to you children (who it sees as being lower in the pecking order)

Would your parent read a book on dog behaviour if you got one for them?