OP YABU, there is no need for children that young to watch a 12 rated film. Even a PG at that age might be unsuitable, according to the ratings, generally a PG is only suitable for children over 8. Films that are rated as PG might be suitable for an 8 year old, but some might not be suitable until a child is 11 (I reckon Coraline is in that category since it scared me stupid!). Even within the U rating there is a difference between films that are particularly aimed at the very young child and those that have only 'mild peril' in them.
Agree with Picardy that some people seem to be 'boasting' about their child watching films with ratings higher than their age. Sounds a bit like my 8 year old nephew who gets to watch 15 rated film, he definitely thinks it makes him more grown up. But, hey, he's a not very mature 8 year old. I have to bite my tongue over that, and not happy about the situation it puts me in when I have to explain why I don't want my kids watching films that are age inappropriate.
I think if little kids don't get scared it's because they don't understand, e.g. DD1 saw an episode of Dr Who when she was about 3 or 4 with The Silence in it, she didn't find it at all scary because she just saw a man in a mask and didn't get the memory loss plotline at all. I think she would now find it very scary. Agree that maturity makes you more likely to react to certain things, I now find films where bad things happen to small children far more disturbing than I did pre-children. I can't listen to 'The Drugs Don't Work' without crying since Dad died. Maturity makes you more likely to find fiction upsetting because you have the life experience to fully understand what is being described.
My kids are terrified of loads of things, DD2 (5) refused to watch Room on the Broom last week because the Dragon is so scary, DS (1) stood in the hallway watching it through the sitting room door.