My parents did this… it was a good thing. They never made me feel defensive about my choice of friends, so there wasn’t a pride issue in keeping with bad choices. In fact, when I discovered I had made a poor choice, they’d say that they’d done the same, you do the best you can, and sometimes your friends just don’t turn out to be on the same page.
The thing to concentrate on is your children’s behavior. Don’t say, “I don’t like Bridget. She’s bad for you.” This makes sticking with Bridget a matter of principle and autonomy. Say instead, “I don’t have a problem with Bridget–she’s always pleasant when I’m around her, and it’s for Bridget’s mom and dad to worry about Bridget’s choices. But if you let Bridget be the excuse for your poor choices–which is not a very nice thing to do!–I do have a problem with that. You know what our rules are. If you can’t let me know where you are and who you are with when you’re out, or you can’t keep yourself where you belong when you’re out with your friends and tell me the truth about what you’ve been up to, then in the future, you’ll be staying home.”