How horribly rude! And what nerve! I agree. You and your family really took the high road by not saying anything nasty back. I'm sure that took a lot of self control!
Those people need to learn that they can't just say whatever and think it's not a big deal. And cursing like that in front of children is just not okay.
When I still had my little poodle, one of my mom's friends said she looked like a rat! I was so incredibly offended. My pup, Moxie, was about 12 years old and blind. It was a total hit to my heart. My pup may not have been the most gorgeous creature ever, but I loved her dearly and she was absolutely beautiful and precious in my eyes and that's all that matters. I didn't say anything then to mom's friend, but I later commented to mom that all that plastic surgery made HER look like the rat.
Made me feel a little better.