Whether or not ending things because of the kids makes sense depend on the history.
If I was dating a man and my child did not like his child, I'd look at why the problem was happening. If the cause of the problem was due to the behaviour of his child, I would raise the issue with the guy in the hope that he could address it. If he didn't address it - or disagreed that his child was doing bad behaviour - I would end the relationship. Even more so if the child was disrespectful or talked back to me in my own home.
Thing is, my home is as much my child's sanctuary as it is mine. I would not issue return invitations to people who made my children uncomfortable in their own home.
In short, yes I think it's a good reason to end a relationship - but ONLY IF she's already tried raising the issue and couldn't get it solved. If she didn't try raising the problem of the kids, then I suspect the issue is actually something else and she's just using this as an excuse.
Never regret anything that has happened in your life. It cannot be changed, forgotten or undone. So, take it as a lesson learned and move on.