Well, good for you. Protect your children. You're being nicer than I would be, to spell it out for them. I think I would just tell them to piss off, they had their chance when you were a kid, and they screwed it up. You can't let them do the same things to your children that were done to you.
You don't have to tell the children too much -- when they ask about their grandparents, just say "that crazy religion" makes them act like that. You can answer their questions about the crazy religion truthfully, appropriately for their ages, so they grow up understanding the damage a crazy religion can do.