FWIW I think you handled it well.
My MIL has a chronic bad habit of buying the things she knows I don't want the kids to have and it p*sses me off to no end. Things like movies (when they aren't supposed to watch tv, this will no longer be an issue because we are going tv free so she can buy them all she wants but no tv means they aren't watching them). Buys them made in china crappy plastic toys, when she knows we are waldorf leaning, buys them pajamas with flame retardants even though I can't use them on my kids, and on and on and on.
I am honestly surprised that so many are attacking you on this one.
The whole "be grateful she acknowledges the kids at all" thing is rediculous. Its better to not have a grandmother acknowledge the kids at all then to have them constantly undermine the parents! Trust me I know. I no longer talk to my mother, and I have a MIL that fits this description to a T. I prefer not talking to my own mom over the constant undermining of my MIL.
Christmas is not a time to try to make a point and undermine mom and dad in front of the grandkids.
: yet it seems thats what alot of grandparents like to do.
I told everyone this year we didn't want gifts we just wanted people to spend more time coming to visit....but as usual no one hears a word I say. I did however along with that letter send a list of appropriate gifts and let them all know things that don't fit our child rearing philosophy will be donated to the goodwill the day after Christmas
Anyway, I feel ya, and I think you handled it well. All the people who are giving you a hard time have obviously not had to deal with super controlling and relationship undermining inlaws.
*hugs* to you.