"I am the master of a hundred arts, and furthermore I have a whole bag of tricks" Der Fuchs und die Katze (The Fox and the Cat)
I have just recently completed reading Grimm Tales: For Young and Old by the wondrous Philip Pullman and feel that I have been drawn into a dark and magical old world. Pullman takes the Grimm Brothers original stories and slightly tweaks them to create a smoother and updated read, but without modernising them. As he states in the introduction, "the formula of a fairy tale is made up of not detailed description but major events and how they pull the plot along". There is no dicking around with a five page Tolkein, Dickens or Hardy metaphor (as much as I love those writers!), it's just straight into the action. 
These stories have always fascinated me, some I recognise from the colourful world of Disney and others from Jim Henson's gritty series The Storyteller (a dark and beautiful world created by the master of puppetry). It's funny, but as a child you don't fully comprehend the "grimm"ness of the tales. A prime example of this is tale of The Juniper Tree. The stereotypical wicked stepmother beheads and cooks her stepson making him into sausages and pies. Nice.
And then look at the witch in Hasel and Gretel about to fiendishly eat them before Gretel shoves her into the oven to be burnt alive. Red Riding Hood and the wolf, etc, etc... Talking of which, there is the most fabulous book The Book of Lost Things by John Connolly which is heavily influenced by the writings of the Grimm Brothers. A most worthwhile read! 
Assuming that violence was pretty commonplace in the 1800's, maybe these graphic images were not as shocking for children as they are today. But maybe it's not even to do with time periods and historical settings, just that children are unable to grasp the real horror of what they are actually reading. This can also be said of many Bible stories which I learnt at Sunday school. I remember saying to my mum that my favourite stories from the Bible were Noah's Ark and Daniel and the Lion's Den. When you look at what these are actually about from an adult perspective, it's quite grim to think they were the most entertaining tales for me as a child - God punishing the whole world by drowning everyone, except Noah and his family (and all the animals of course), and then Daniel was sent to the lion's den as punishment for daring to pray to a god other than King Darius (luckily coming to no harm as God was protecting him).
To sum up, I think that these dark and macabre stories are successful for a reason. Fear and fantasy work well together and even if they're not real, having a dark shadowy world to be scared of as a child can help us to try and keep it a make-believe place when we become adults. We fight for the good people like us and try to keep the wicked witches and fiends away from our family homes...
