If that were the sum total of this story I'd agree with you. Although Hustler usually shows a little more than just a naked body.
Can such a young child really have any idea what the picture was about? ...
Good question and that's where this story takes a big u-turn from reality. From the simple issues of parental rights, privacy and nudity. Do two year olds talk? I guess some do but how many form cogent coherent sentences like "Mom, if you put this picture on my wall I won't call you dirty names anymore." That's a mighty big psychological concept for a 2 yr old. How many 2 yr olds "thumb" through magazines? Paw through and mangle maybe, but thumb? Then this woman has the presence of mind to threaten to murder the neighbor in front of police officers.
Oh yeah, she's just a mom doing her best who feels her rights were trampled on. You betcha! The implications of those statements make putting up a Hustler centerfold seem mundane.
People still have rights even if they are not sinless themselves, and I would be pretty livid as well if I saw someone trying to take my child. It's valid to question whether a nude pin-up on the wall is sufficient cause to take a person's children away from them.