What you're describing sounds like a combination of uninvolved and permissive parenting. Here are the Cliff's Notes versions:
Uninvolved ParentingPermissive ParentingI would say that uninvolved parenting has been around a while, but permissive parenting is a new fad, driven largely by misunderstanding what attachment parenting is all about. Attachment parenting is a new idea from a book published in 2001. Dr Sears has become this generation's Dr Spock.
Also, I've seen where permissive parenting is an overreaction to a parent's own experience with child abuse. Rather than repeat the cycle, they over-correct the other way.
Here's an interesting article which discusses how a mother lost custody of her kids just by being too permissive. It was in the UK though. I would not expect this to happen in the US, because the laws more strongly favor the parents than the children in these cases:
http://www.telegraph.co.uk/news/ukn...tle-over-permissive-parenting-style.htmlBut to answer your original question, NO. It's definitely not normal. Things have changed, but they haven't changed that much.
Unfortunately, your daughter is perfectly within her parental rights to screw up her kids as much as she likes, up to the point where it puts your granddaughters or others at risk of physical harm.