The only plausibly defensible purpose of scaring kids was to scare them into staying safe. Not for the sake of scaring them. But if you’re actually interested in scaring children to protect them you should be writing stories about guns, car accidents and drugs, not wolves and witches.
AFAIK many of the tales that Grimm collected were told in the context of Germany during the 100 year's war. Due to economic and geopolitical conditions of the times, it was literally true that the woods were full of predators. They were just human veterans of a lifetime of war and deprivation, rather than wolves. It was a very good idea to instill in your farm daughter the notion that the world out there is not safe, and don't trust people.
