Everyone makes choices. The parents choose not to practice their faith. There are consequences for everybody. If it's addressed now, they have the opportunity to do what's right. By robbing their children of a life in the faith, they do them no favors by creating a charade out of Hiloy Communion.
Remember, God is merciful. He will equip these children with everything it takes to make the decision for themselves if the parents choose not to. The weight of this rests on the parents, not the priest.
Hiloy? Uh - I meant "holy" communion
Holy Communion to me is a different issue from religious ed. Sacrament preparation is very serious. If a child is not in a state of grace they should not recieve the sacrament. Religious Education is offered throughout 10th grade (at our parish). A child does not have to be in a state of grace to receive religious instruction. In fact, without religious instruction, the child will have little chance of ever attaining a state of grace. I have no problem with the priest withholding the sacrament. I have a much bigger problem with the priest withholding religious instruction to children who are likely not getting much of it at home.
Since you don't know that to be true, why say it?