Unfortunately, the ss takeback of $$ is the law. It's on the SS web page, and available for us to see and read every day. Most of us don't take in the details of things like SS - including me, so we get surprised by stuff like this. The government had no choice. But, yeah, sometimes we wish that the govenment would make a mistake in our favor.
any grand parent name is really ok, if it's said with love and respect, especially from a child.