Your grandmother has lived for over 70 years. Many many good people do not even get that. Joan of Arc died at a young age, and so did John the Baptist and Jesus.
So, she got a full long life and it was filled with family for multiple generations. If that isnt enough of a reward, what would be.
As far as her dementia, that affects you and your father a lot more than it does her. When my grandmother reached that point she was happy. Granted that she thought I was her father and not her grandson, but that only bothered me, not her. Senilia dementia is a terrible thing, but it is nowhere near the worse thing in the world.
As to why she didn't die at the onset? Well, I would be answering for God if I gave an explanation. Maybe God knows that your grandmother would willingly spend years in dementia if she thought that it would bring you closer to God or help your soul. Maybe this is a lesson that your father has to learn, and it is not aimed at you. Like I say, I would be speaking for God if I tried to seriously answer that question. The reasons are unknowable to us for why God does or does not do anything, or if God does anything at all. Many people question the existence of God and I don't blame them for it. It is the rational viewpoint.
You know who your grandmother would have you ask your question to, don't you? It would be her priest, rabbi, imam, minister, or whatever they are called in her faith.
I am very sorry for you. You, your grandmother and your entire family are going through a terrible experience right now. I hope you find an answer that satisfies you.