Whilst I understand that you were trying to help the kids have a better time, I really can't understand why you decided to go in to direct competition with the balloon modeller. His work might not have been up to the standard you're used to but he was doing was he was paid to do and, obviously, the client wasn't complaining at that point in time. To me, that would be like someone coming in and setting up a DJ rig opposite/right next to me. I think, if that was me, I'd be a little miffed by your actions especially as this situation has the potential to have the kids go up to him and say "The DJ is better at making balloon animals than you!". I think I'd prefer to let other service providers get on with doing what they've been paid to do and for me to stick to music-based activities.
That was a bad situation and I really feel for the kids in these situations. I can only hope this was a one-off and that a police ticking-off will be enough for this dad not to do it again. Unfortunately, I can't help but think I'd be proven wrong.