Yes, I do think that is rude.
Seems like older people totally speak whats on their mind. Even my grandma does it... But I love her. She's told me my female is ugly because her features are bigger than my males, and she LOVES him... I just laugh and tell her I think she's gorgeous! I know she don't mean anything by it, and come on it's gramma, I LOVE HER!
Although, I'm not sure how I would react to a total stranger saying this, since I speak my mind too much as it is....
Come to think of it, I know a few old hags like this that go to church with me (that sounds bad!), but they are truely mean!