I'm not keen on fairy stories containing beautiful, helpless princesses rescued by handsome, brave princes, etc., etc., but on balance I don't see that much of an issue with them.
Many books written for children are irrational in the sense of not being based in reality - the tiger who came to tea; imaginary monsters (including the one that ate Bernard up and - unnoticed by his parents - replaced him); the duckling who was upset about being called ugly, etc. etc. In my experience, children love these books and want to read them over and over again. As long as their reading matter is mixed and also contains stories that reflect reality, I think it's OK for them to read fairy stories. Also, along with allowing children to experience imaginary worlds (and, goodness knows, with some of the difficulties children face these days it may be nice for them to "escape" for a while), some of these stories have quite valuable messages.