I enjoy the idea of this.
Recently, I have taken to looking at, and exploring darker themes in my own writing, so this would be right up my alley. It would depend really, on how dark you were looking to go. Were you thinking of adding things like incest and rape in to make them extremely dark, or were you thinking of only gore?
Speaking of Fables, "The Wolf Among Us" took a lot of Fables and turned them dark. It was actually based on the comic, Fables.
I'm not sure specifically what tale you are looking at - and I guess for 1x1 input from both parties would be required.
You mentioned Red Riding Hood above - what would make it gory?