I'm actually fucking tired of hearing stories like this. So she's too old for prison, but not too old to have a driving licence even though she was blatantly unfit due to old age. Personally I think she should be locked up as an example to the many older drivers out there who refuse to surrender their licences even when their families beg them to.
My grandad was like that - in the end he was sectioned due to his Alzheimer's - the driving was one of the things we raised during discussions with doctors. We were relieved that that finally stopped him. But it was horrifying, the state he was in when he managed to persuade/bully his very elderly wife to lend him her car keys.
Young people driving also have their own risks, but we don't tend to hear of them driving up the wrong way on motorways or getting confused about what the accelerator is.