I feel the same way. We had a small dog, and he never bit our kids, but he thought about it a few times. He would nip at them, and ultimately we decided he would be happier in a house without kids. Luckily for us, my brother in law really wanted a dog. They were a perfect match.
This family says it wasn't the dogs fault and they'll be more careful. I can see their side of it, but it's definitely not what I would do if that happened.