I think the OP has raised some legitimate concerns re her grandchildren. I do think many children are over-indulged and have developed a level of feeling of entitlement that is not good for them or the people looking after or teaching them. I'm not referring to showing love and affection and engaging properly with what a child is saying, or to spending (some) time reading and playing with a child. I mean giving in to unreasonable demands so as to avoid tantrums - just because it's easier, in the short term at least, to do than standing firm.
I do think some of the remarks on here are rather rude - such as telling to OP to "butt out". Also, saying "it's not your problem" and (disgracefully I think) "they're better off without you" is, at best, not helpful and, at worst, downright nasty. Norton doesn't see her grandchildren as being her "responsibility" or a problem that she has to solve. She is, worried, which I think is natural.
As someone else said, "spoilt" children tend not to be very likeable and may well be unpopular with other children and adults. It is surely natural to be worried about that?
Norton I do understand your worry but I am not sure of the best way forward. Unlike other people here, I don't think it's such a terrible thing to voice a concern to the parents - though perhaps to do so very sparingly. Obviously if you think that your son and daughter in law would take umbrage and it would cause bad feeling between you all, then it's probably better to say nothing, in the hope that things change as the children get older.
As another poster said, if the children come to your house then, so far as manners and respectful behaviour are concerned, it should, within reason, be "my house, my rules".