I can understand your position. But it is that disconnect with death that we must overcome. It is why the social service workers encourage parents in such situations to be open and honest with their other kids about what happened. They do recommend that the deceased child be visited by the parents and other children. Obviously it is the HOW we handle death that can make a difference. I attended every family funeral when I was young, mostly great aunts/uncles great grandparents etc... the first few were all traditional Irish Catholic funerals followed by wakes. People said their goodbyes in the church, then celebrated the life of the individual at the wake that followed. People that knew the deceased would share stories (usually with large quantities of alcohol being consumed... like any good Irish Catholic would do). I always liked the wakes as often I would learn things about the deceased that I had never known. I guess that is a large part of why I don't have a problem nor did I have nightmares about situations like that. As I have lost friends and family over the years, the Irish wake tradition is something I share, regardless of who passed.
I agree that people must act in such situation to whatever degree they are comfortable. If a parent isn't comfortable having the other kids see the dead child, the other kids will pick up on that apprehension and it could make matters worse.