my 2 year old loves using my Nikon D80, he takes self portraits...lol
i would love to get him a Fisher Price camera $70 Canadian, but hes just turning 3 in march sooo... ill wait...
if you think your granddaughter can look after this camera.. ie not throw it then i cant see why not specially if she is very interested it cant hurt to encourage this hobby talk to Mum and dad see what they say?