The trouble is - where someone "feels" that they come from, or has passion about; isn't particularly related to where they, or their imediate family were born. This is especially the case in places with fluid borders, like England:Scotland, England:Wales, or, more recently, the Shengen area Europeans.
Take all those 8th generation Americans who "feel" Irish.
Or take one of the lads I play with who's the only Englishman in his house at the moment, despite the fact that his Welsh wife was born in England, and all 3 kids were born in England. Wife and 1 child are Welsh during the 6N, whilst the other 2 kids are both Irish - due to his grandfather who has instilled the kids with their Irish heritage. The grandparents are 1 Scot, 1 Irish and 2 English; he's not aware of anyone having been born in Wales going back 3 generations - but 2 of them "feel" Welsh, because Mum went to secondary school in Wales.
I would strongly suspect that pretty much all British posters (certainly all who live near a national border) here knows a similar family (maybe not quite so split, or they may not know that the family is like that) where the kids, or even the parents "feel" that they're from a country they weren't born in. That proud Welshman who moves to London for work, and settles down, but raises his kids Welsh - who in turn do the same with generation 2, or even 3.
Consequently, I have no problem with the grandparent rule - but I DO like the suggestion that it should be to take time off the residency qualification; which is soon to be 5 years (rightly) - make it 1 with a grandparent, whilst 2 grandparents = 1 parent. Setting a hard and fast rule on where someone is allowed to "fel" that they come from is a fool's errand. Of course, it should also be about more than that - for example, which country's rugby system produced the talent?