Why tell traditional fairy tales to children?

This blogpost is inspired by Catarina's recent reflections on fairy tales and their morals. I have been a long-time fan of fairy tales. Preferably not the polished versions - even the Grimm brothers were fairly polished, for instance, the witches' discovery that Rapunzel was seeing someone was initially prompted by her pregnancy, but this was censored in later versions of Hausmärchen.

Fairy tales provide a fascinating window onto beliefs and practices in the past. While I think few would still hold the hopes that the Grimms and other collectors held of discovering ancient religious beliefs in them, they have been particularly interesting to evolutionary literary scientists and cognitive anthropologists. Evolutionary literary scientists are interested in finding recurrent patterns of human behavior in fairy tales, for instance, in the treatment of stepchildren (e.g., Cinderella), the competition between mothers and daughters for mates (Snow white). Cognitive anthropologists notice that some elements reliably predict the success of fairy tales over time, for instance, tales with a limited number of counterintuitive elements work best. What I am wondering at is why parents today would still bother to tell traditional fairy tales to their children. This question is considerably complicated by the following observations: 

1. Many fairy tales promote ethical principles today no longer held. Thus, telling children such stories today might not be desirable. For instance, Little Red Riding hood as recounted by Perrault  ends with the cautionary note that girls better beware of wolves, and Perrault makes it quite clear he doesn't  mean *real* wolves.
2. The presumed benefits of fiction, as proposed (but as far as I know not rigorously tested) by evolutionary psychologists are the development of theory of mind and vicarious learning (see e.g., Tooby & Cosmides on this, and lots of essays in Gottschall and Wilson (2005). But such benefits could equally be gained by telling more politically correct versions of fairy tales (as many respondents to Catarina's post pointed out). Or even by other forms of fiction. As a matter of fact, children have never had such a wide variety of choice. So why go for traditional fairy tales? 

As a mother of one daughter, I have been keen to tell traditional fairy tales, preferably orally and not from a book, and preferably going back to early sources (so, trying not to have versions that are too censored, embellished or Disney-schmaltzy), or to early tellings of my grandmother, who knew a lot of local, Flemish tales (from Limbourg). Many of her tellings I only know from her and they probably do not exist in any written form at all (often involving farmboys outsmarting local demons).

I always felt these oral tellings were a special moment for us (my grandmother and me, and my daughter and me), as I imagine myself in a long oral chain of transmission, but, of course, with the fairy tales I get from books this is not the case. My daughter and I sometimes also invent alternate endings, and analyze the behavior and choices of the characters. Also, not all fairy tales would make feminists despair - the Russian fairy tale  Vasilisa the beautiful, for instance, one of my favorites, features an active and brave female character who ends up becoming a skilled tailor.

Are there pedagogical benefits to be gained from fairy tales that are not available in other forms of fiction?  Perhaps the format - oral tellings - is of interest. For instance, I regularly retell the same story, often with variations (unconsciously or consciously introduced by me), or several versions of the same story (e.g., the seven ravens, the twelve swans). We think of ways to change the story. The familiarity and fairly rigorous structure of fairy tales (for instance, typically there are three tasks or three trials, which is mnemonically very efficient) allow for this flexibility, a flexibility I do not easily get from other forms of fiction.