That's crazy! She is obviously not a knitter! I have a feeling she's going to be getting a few angry letters from knitters, crocheters and quilters.
When I knit at events it is always something easy so I don't have to keep referring to a pattern. I wouldn't knit at say a wedding or funeral but I have knit at lectures at my church. No one was bothered and it helped me stay alert. I think more people were disturbed by the guy a few rows behind me playing on his cell.