I probably would have answered: "if your children were this ill mannered then why bring them out!". What a ridiculous question this 'adult' asked!
When I had my rott, I did not mind if people greeted him because he had no aggressive tendancies. My min pin on the other hand is a different story. When people approach her - I advise them right away that indeed she is cute but she will bite if approached.
Ignor the ignoramous as you have every right as a responsible dog owner to say 'NO'. You did good.