There's always one in a play group who has to ruin it for everyone else.
I too wouldn't have been so nice, I use to get really protective if another adult closed in on my son. Which isn't always the correct tactic.
But you handled it your own way, and really if you think about it, it's not something to stress over she has no manners and apparently never did and you aren't going to change that by becoming confrontational.
I also find that 'ballsy' people like that usually love confrontation, and seem to "energize" by pushing people's buttons, why else in the world would someone intimidate another person's child, knowing that the parent is someplace close and might just sock em one.
so ignoring her stupid approach was probably the right way to go.