I agree that the OP phrased it perfectly and left no room for the SIL to misinterpret her meaning.
I think the reason SIL is miffed is because it was embarrassing to her to have to admit to the child that no, as a matter of fact, she could not make the child a sandwich right now. Up until that point, the child probably thought Grandma was all powerful and invincible and could (and would) do whatever she wanted.
I think SIL felt "overidden" and usurped of some of her 'power' in the child's eyes and possibly also her own. I suspect that both child and Grandparent thought they could do whatever they pleased, whenever they pleased. This was a tough awakening, but I have no doubt the OP was gentle in her response and it was an awakening that really needed to happen!