MBSLynne: I have a daughter (nearly three) who would crack up if I told her, the nurse was looking for a stick. If the parent was seriously trying to scare the child then that was inappropriate.
With regards to the circumstances though, you just never know what they're going through and the kids do know when you are uncomfortable.
My daughter got her own "Computer" for Christmas.. "V. Smile TV learning System" it comes highly recommended. There are other kids' computers. Some of them don't even plug in. I wouldn't be too alarmed about that.
On a side note: While I was writing, my daughter just drew all over the walls with an ink marker. Sigh!