It's entirely rational. I bought plenty of used phones, and even repaired them myself because I couldn't afford new ones. Would not do that again.
The risk of getting scammed, or getting a phone with issues is too high. Both have happened to me in the past. It can even be dangerous if someone swapped out the battery with a cheapo fire hazard. A lot of resale prices are also simply too high to be worth it.
Now imagine your grandparents. As you said, the exact model/chip doesn't matter, any phone is good enough. What they're buying is an appliance that will last at least the warranty period (2 years, EU), but likely much longer. Basically piece of mind at a fixed price. They won't get scammed (online) or ripped off (used in a physical store) if they buy directly from Apple.