I think we all understand your general point of concern. Pretty much everyone who posted expressed the concern. I, myself, turned to a coworker and said "Good lord, I hope my daughters don't look like that when they are 12!"
From what I've heard, I think the photographer handled the situation as they should have. Whether or not they walked off the scene or refused to take the pictures is a matter of business sense, principles, and art. All three of those are pretty subjective, and it is absolutely not for you to personally judge if the OPs choices were right or wrong.
No laws were broken... no laws were even gently nudged... and the parents were present and approved of the pictures being taken, even when the photographer expressed some concern.
The problem here is that you are being unconstructive and reactionary, and all that will accomplish is to actually make you look foolish.
If anything, it is the parents who should be questioned and not the photographer... and even then... really not your place.