Well, first of all, congratulations on the new grandchild.
I wonder if maybe your daughter did not create her own registry from scratch, but perhaps went to a store or an online site that gives advice and makes suggestions? I think it's easy, especially the first time, to get a little carried away, a little influenced, by the clever marketing strategies and the registry "experts" who really know how to convince a new mom-to-be that she needs the $300 quilt because of the design, the quality, etc.
It's only when you're an experienced mom that it dawns on you that the designer quilt and the cheap blanket from Walmart both look pretty much the same when the baby poops on them or throws up or dribbles strained peas on them.
So give her a break, chalk it up to first-time registry tactics, and let her have the fun of the registry. It's kind of like knowing you have a week's vacation coming up. You look online at sites that offer private cabanas in Fiji and treehouses in Borneo, and you dream and talk to your spouse about how you both NEED that cruise to Antarctica, and then when it comes time to actually book the hotel, it's a Best Western a couple of towns away, and you go and have a wonderful time anyway.
I wouldn't say anything. Give her the gift that you can afford, that means something to you and to her, like books that she loved as a little child (either originals that you saved, or order new copies online) with a note about how you used to read that story to her and how she laughed every time you said "moooo" for the cow or whatever.