This may seem like a detour but, firstly, let me start by saying that we taught our son to read using Dr. Seuss' books. We first learned the alphabet. Then we sat down for about half an hour each day with "The Cat in the Hat", incidentally, and started spelling out each letter of each word. I would then explain how each letter was pronounced using the phonetic rules (yes, the English language indeed has those!) I recalled from my English Grammar days; English is a second language to me so I had to memorize those when I was learning it which helped. The first few days it took us half an hour to go through a couple of lines. Within a week we could go through a whole verse with my son sounding out the words correctly and within a month, he was reading, slowly but surely. Within a couple of more months he had moved on from Dr. Seuss' books and only needed to ask how the really tough words that recognize no phonetic rules are pronounced.
So, honestly, I have no idea how anyone would fathom that Dr. Seuss' books could impede learning how to read. In fact, I would wager that the imaginative flourish they encourage far outweighs the perceived negative consequences that invented words may cause. Life is not an exact science. I don't see why literature should be different.
As to the original question, I'd like to remind the OP that YOU ARE THE PARENT. The grandparents are only accessories to the fact, if they so wish. YOU are the one who should make decisions about your child's upbringing. Grandparents may provide input that you are free to consider or discard at your own discretion. Make no mistake, unless you completely relinquish parenting to the grandparents, it is YOU who bears the responsibility in raising your child in the manner you see fit and it is YOU who has the latitude to make decisions about their well-being. It is YOU who will also likely carry the guilt or pride with the outcomes that are perceived to flow from that.
The point I am trying to make is to make an effort to divorce yourself from the grandparents viewpoints and really see them as input from the outside world, as welcome or unwelcome as you may consider them to be. In the end, YOU make the call on what your child should read.
On the other hand, do appreciate the fact that grandparents are to be viewed as volunteers in aiding the raising of your child. The do have a right to refuse to go along with your directions when the child is in their care. By the same token, however, you do have a right to refuse to leave the child in their care. Again, YOU ARE THE PARENT!
As for anyone who would somehow deduce that Dr. Seuss' books may be damaging to young children, I would wager there are many other influences from the real world which would cause much more harm that you have very little to no control over whatsoever.
If you are indeed scanning your child's environment that carefully for potential dangers, I would also suggest that you may be micromanaging their world and may be raising a "hothouse" child which would have a rough time adjusting to the realities of the outside world when the time comes for them to face it. That moment will most certainly come, sooner or later, whether you like it or not, barring any calamity that I would not wish on any parent.
In the end, the degree of control one has over their child's upbringing is often highly exaggerated. Recall families that have more than one child where the children turn out quite differently, regardless of the fact that they are raised by the same parents even if the parents are quite consistent with their parenting approach across siblings. The best you can do is try, to the best of your knowledge and abilities, not ignoring the fact that, at some point, children will start making their own choices in ways that may agree or, to your dismay, disagree with a lot of things you have taught them.
Don't get your panties in a knot and tell that to the grandparents, too! There is hardly any certainty in this world and parenting is by far no exception. Follow YOUR heart and don't let too many people muddy the water for you. Otherwise, you will be attempting to live someone else's life and that has rarely worked out well for anyone I know.