Dave,
This is an interesting subject. I think most things have already been said here (but that never stops me, does it?). I think the example you gave is a good one for the conversation. On one hand, it is ridiculous, especially since it was a stranger correcting a child. That is just annoying and wrong.
On the other hand, language usage affects the way we think, in a kind of Orwellian sense. Regardless of how you regard feminism, there is an obvious subtle system of gender discrimination in place, especially if you consider the USA. For evidence, I suggest that the number of female US presidents vs male US presidents is not proportional to the female vs male population. The same goes for the legislature, corporate executives, scientists, and so on. Even Europe is way ahead of us on that score. For approximately one half of the population, America is not the land of (equal) opportunity.
The desire of feminists to shift the usage of terms from things like Chairman to Chairperson, for example, is not outrageous when you consider how subtle the effects of language are on the way we think.
I am not sure what is worse: blatant discrimination or subtle discrimination. Because blatant discrimination is easy to identify and it easily causes enough righteous indignation in most people these days. But subtle discrimination is much more insidious. Being not in your face, you forget it exists until you look at the numbers.
All that being said, I think the lady correcting the kid in a public place is just downright rude and she deserves a pie in the face.
As for the phrase "War on Christmas", it was invented by the John Birch Society in 1959. It was one of their first "causes". The Birchers got the general notion from a book by Henry Ford called The International Jew written the early part of the 20th century. Among other things, Ford proposed that the Jews were waging a war on Christian holidays. The book was well received by certain infamous factions in German politics and became somewhat of a Bible for them. Later on the Birchers shifted the focus to communism, since they were the bogeymen du jour. In one of their tracts they said,
"...the Reds and the U.N. fanatics have launghed an assault on Christmas as a part of a much broader plan, not only to promote the U.N., but to destroy all religious beliefs and customs. What they now want to put over on the American people is simply this: Department stores throughout the country are to utilize U.N. symbols and emblems as Christmas decorations.
The "War" gets brought back every ten years or so by someone like Bill O'Reilly looking for better ratings or to build membership in one tin-foil hat paranoid organization or other. The evil perpetrators have morphed from Jews to communists to the modern culprit. the "secularists.", who are evidently holding secret meetings with Walmart senior management, convincing them to go against their usual fierce and viscious competitive instincts and change their signage to "secular symbols" at Christmas time so as to strike a blow into the heart of Christianity, even at the expense of their own profits.
In summary. Widespread use of word choice has subtle effects on the way we think. However, the lady you mentioned deserves a pie in the face.