To what extent should parents let their children create chaos?

I observed an unusual “grand-parenting” style last week, and I’d like to get the community’s input:

I was at a family friend’s house. The lady – let’s call her Jane – is very generous with her grandchildren, and I’ve always admired her for the way she takes care of them. She gives up a lot of free time for those kids, and she always knows what goes on in their lives. She can be impatient when stressed, though, and she definitely was stressed on that day. Minor health trouble. Nothing scary, but a lot of waiting around in hospitals.

While we were having coffee, the kids arrived. There are three of them, two girls and their older brother. The youngest is four, the boy must be around eight.

The kids were happy to be with grandma, and after greeting her, they settled down to play. It went well for about 15 minutes. At this point, they grew restless. Not bored – they had plenty of ideas: They wanted to build a fort, which Jane did not approve of. They wanted to play in the garden, which Jane did not approve of. They wanted to paint with watercolours, which Jane did not approve of.

The kids got frustrated, and at some point, everyone gave up. The afternoon ended with all kids in front of the TV, but not watching. Instead, they constantly badgered Jane and each other, channeling their pent-up energy into being “difficult”.

Jane clearly was trying to keep the house and the children reasonably clean. I notice clean kids are often bored ones. There are children who don’t enjoy mud and chaos, of course… These kids, though, desperately needed to do some running around.

What’s your opinion?