Calling someone's parenting skills into question after they tell you they're not going to die from eating food off the floor is really not necessary.
But, honestly, I wouldn't like someone doing that, either. You can't really implement the 'five second rule' at someone else's house.
Yes, she drives you crazy, but she is your children's grandmother. She's your husband's mother. (If you're really not that comfortable with her being alone with the children, have your husband bring them over.)
I'm not married yet, but my own mother drives me crazy. Without getting into it, I'm at the point where I know I love her, but I just don't like her very much right now.
I don't completely cut her out of my life, but I deal with her only when it's absolutely necessary. I avoid talking about the things I know are sore spots with us. (And it helps that I live in a different country now.)