Their reaction kind of makes sense. Overprotective... perhaps. But I would say they err more on the side of mis-informed. You can never understand someone until you walk a mile in their shoes, and it seems like these parents haven't exactly gone that far.
The thing is, they don't understand these games - or any games, for the most part. And the natural reaction to the unknown is fear - and I cannot blame them for that. Otherwise every child would have burned their hand on a stove. The trouble is that they fear it... but make no effort to understand it. It is one thing to observe a foreign object and think "gee, that could be a bomb. I should try to safely investigate, after first ensuring the safety of myself and those around me". It is another thing entirely to observe said foreign object, immediately jump to the conclusion that it is a bomb, and run around jumping and screaming "IT'S A BOMB!!! RUN!!!", which would probably get more people killed from the resulting stampede. They then forever live their lives in fear of the object, and shun any who would go near it.
Yes, be cautious about the mental health of your children. No, don't freak out and let fear ruin what could potentially help them. The sad thing is, this kind of thing has happened in the past so much... back when the earth was flat, and the universe revolved around Earth...