I just notice a lot of irresponsibility in your family. Honestly, that's the only problem I see here. Maybe not you... but it seems like your parents find dogs disposable and not worth training & spending time on. If my parents threatened to put my dogs to sleep, I would definitely re-home them where time was spent training. Actually, I'd move out, but that's not an option for you.

Furthermore... NO DOG, not even the most mild-mannered, should be left alone with little kids. Especially rowdy, misbehaved little kids as you describe your siblings to be. It sounds like your grandmother would not be able to handle or stop them from mistreating poor Rupert. I don't think that is acceptable at all. I would nevereverever leave my little brother alone with Gonzo OR Fozzie, even though they've never shown any aggression or over-excitedness with him, because the two cannot be trusted together, period. Only your parents/you/your grandmother are to blame for the whole thing, IMO.