Sick kids, spouses out of town, sick baby sitters, late baby sitters, teacher conference days, teacher work days, etc can all create problems. I could make them stay home and take a day off (paid or unpaid depending upon their job), but allowing kids at work focuses non productive time towards their family rather than the internet or cellphone conversations and encourages them to feel good about where they work. There are jobs where having kids around is not appropriate, but for many it is just fine and most of my employees don't abuse it. Remember, the goal is a happy, productive, and profitable workplace. While I haven't had anyone ask to bring a aging parent to work yet, I have seen much more time off needed to care for them.
My folks earn 4-6 hours of PTO (paid time off/vacation/sick/personal) each 2 weeks of work; that's about 3 to 4 weeks a year. Letting them have a child at work for a few hours every once in while saves them PTO that they can use when they want to rather than when a child needs them.