There is a difference between fear and awareness. You should be aware of a hot stove and respect it and use caution. You should not be taught to fear a "...sea monster, with a giant pouch on its back just for little kids." I generally agree that we should not yell at or strike children, but instead teach them to be thoughtful and considerate, just not through scary stories of unreal dangers such as sea monsters. If the story was about the very real possibility of drowning, and not about an unreal danger of a sea monster, I could be onboard. I would prefer to teach my child about the very real danger of drowning and the consequences such as the two of us being separated, rather than a fantasy such as a sea monster. I would simply replace the fantasy danger with an actual danger.