Wow what a story! Im glad your dog is doing okay, but Pitts... or any dog like that, i dont care how they are raised or handled, when they are "off" their property, they get a "wild" streak in them. I know my one friends dog got attacked one time, and when they took the case to court, the court told her that it was partially her fault for not putting up a fence in her own yard if she knew the other dog was dangerous... She did win the case for the money for vet bills, but she didnt get anything else out of it.
I dont think even if the owner in this case of that loose pitt thats attacking your dogs did put a fence up for HER own dog, would help, because Active dogs like pitts always break out whether its by digging or jumping out... or just breaking it... they need to have a lot of exercise or they become even more aggressive.
Good luck with everything! Keep the pups and kiddies safe... get the cops involved as well. Any dog can be agressive, Pitts or not. If she wants to keep her dog alive, she needs to step up or find it a home on a BIGGG empty farm where the dog can stay away from other animals, and run its little heart out (maybe even give it a job on that farm) before they HAVE to put it down.... I think it would make a much happier neighborhood, and this "mean" dog would be probably much happier.