No, I dont think you're over-reacting either. This lady has probably been involved in rescue for many years and has done her bit to keep cats safe, but it sounds like now she is up against it and cannot cope. Not really surprising given her age, to be honest, however well intentioned. I think the RSPCA have a duty to step in, although I hesitate to say that, given if they get involved, most of the cats will likely be PTS.