This is a sad story, I do believe the parent's were to blame in this particular case, but children being diagnosed as bipolar happens way to often. It's referred to as "early onset bi-polar". I don't understand why anyone would have the authority to make such a diagnosis in toddlers.
I wish I had links, but I researched this issue a few years ago and was appalled at the number of children and toddlers being diagnosed and medicated. I did this research after my sister was diagnosed at the age of 8. She came to live with me at that time after years of being abused by her father. Now....her father's family does have a history of mental illness, but I knew her behaviour was due to the abuse. She was placed with me by a state agency, they actually wanted to admit her into a mental health facility. I fought with them over the medication issue and eventually was given permanent custody. She is now 13 and doing fine, well aside from normal hormones, but anyway I don't know where she would be now had I followed their advice. My sister was never taught right from wrong, she was just hit. Her parents were both drug addicts and she had a very rough childhood. The only diagnosis that I ever agreed with was post-traumatic stress disorder, she never needed medication.
In my research I also found that alot of abused kids are placed in mental health facilities and medicated. Some of them stay there for years. I know from experience that most of these kids just need a little therapy and some love and they are fine. I don't get the whole mental illness in children issue. Another thing is the drugs being given to these children hasn't even been approved for use in children, yet Doctor's are allowed to prescribe it??? I don't get it