You are not a bad person.
Even if you were able to physically, financially, environmentally and all that, care for them, and you opted not to that would not make you a bad person in my opinion.
Not all grandmas want to be a parent again and that's quite reasonable, quite common and you've done your time.
It's ok to just be grandma and enjoy being a grandma.
Your Niece has stepped up to the plate, what a wonderful woman she must b