Is there ever a time when cutting a grandmother out of the picture is the right thing to do? If she has shown manipulation of the kids and parents, clear favoritism and poor safety measures (but does not admit to any of it)?
Answer: Of course - once you're sure she poses a risk of real damage (vs. just being a nuisance), and you've tried all possible ways of preventing the damage while still having the person in your life.
That might include shorter/infrequent visits; avoiding visits at emotionally charged times, like holidays; hosting visits only on your own or neutral territory; sharing activities (going to a play) vs. conversing; combining visits with neutralizing third parties, etc.
It may seem ridiculous to go to such lengths to accommodate someone toxic, but I think there's a tendency to oversimplify villains. Often people become manipulative as an almost feral response to past emotional trauma. Consider that Grandma herself is a victim, and see whether that illuminates anything for you.
If it doesn't, or if there's just too much opportunity for her to scar the grandkids emotionally, then estrangement might be your only choice.
Reader: I suspect everyone who mistreats others was once mistreated; I'm sure it's a big part of why they make the choices they do. Compassion is important, but shouldn't we hold people responsible for their actions?
My mother was abused as a child, and I sincerely grieve for her many losses. It seems tragic that we would add to those losses by saying that because she was a victim, she can't make better choices herself - she can't find the courage and dignity to live a different sort of life. Excusing manipulation, dishonesty and abuse because someone was a victim seems to communicate that they can't be better than that.
Answer: I don't advocate for "letting a 'victim' behave inappropriately." I advocate for making estrangement a last possible resort. Many bad behaviors are intractable, and there has to be a third option between re-raising an adult relative into a better person and kicking him or her out of the family. If I favored "excusing manipulation, dishonesty and abuse," then I'd urge people to pity these relatives and embrace them without reservation. That's not what I've advised.