This episode seems on its surface to abandon the promise DAnny made about Michelle getting more chance to have less rules after she broke the dinosaur. However, Michelle take a mile when given an inch, and it's quite possible that she pushed too far,a nd Danny or, if she got too bad, D.J. would then crack down iand it would be right back tot he same thing.
Of course, no child would be not allowed to pick anything out at that age - a man that controlling would be creating far more problems than we see. However, Michelle may have been told to pick between one of 2-3 things before the dinosaur - and remember she wanted a tattoo then, too. So, she must have matured in the span between then (really, Disneyworld) and this episode.
However, while it's apparent, and I normally say we have to figure we don't see everything, the stuff Danny picks is so bad there should be a bit more explanation with this one, instead of making us assume that's what happened.