The grandparents may inundate the kid with stuff, but the parents are the ones providing day-to-day examples, guidance, discipline, lessons, etc. Even if they grow up with tons of stuff, how you raise them to deal with it will win in the end.
Plus, it's easy to get rid of excess stuff, through selling, donating, or gifting. Anything new w/tags that you don't need, try to return for cash or credit. If you can't use the store credit, sell it online and get some cash. My mom overbuys for Christmas every year, and every year I return stuff to stores. Mostly, I get credit that I then use to buy what I actually need/want.