OP, I would be concerned too. Thankfully, the teachers were paying attention to the quiet and caught them in the act. I, personally, don't think I would pull dd out if she enjoys the school and they fixing this current situation.
And not to get caught up in the other rubbish..I was a SAHM and working mother. I was a much better mother when I worked. Having something outside the home completed me. I love my children and I love the time I spend with them. They are all socially rounded, intelligent children that have not been affected by a few hours a day in a daycare center coloring and playing with their friends. Different strokes for different folks.
Art, if you like your children home and not in any situation that involves daycare and can afford it...I say more power to ya. Just don't assume your stand is anymore right than anyone elses...just different.
Kelly