The filmmakers here tried something and failed. It was a noble attempt at something very delicate and I suspect that they will eventually succeed at capturing this balance somehow. Commentors here call it black humor, but there is something more dear here in the children's reach. It isn't Lemony Snicket. Its "The Ice Storm."
Failure or not, they did something well. Sarah Polley is an amazing young actress who can do what I call folded acting: where she observes her character and conveys the observation. This allows her to play special roles. Here she is in the story as our surrogate who watches. She can't save the story, but she does her job.
Ted's Evaluation -- 2 of 3: Has some interesting elements.