Well depending on the context it totally changes the situation. This doesn't mean that the person saying this is happy that grandfather died.
My uncle had brain cancer for 15 years and became blind for the last 5 years of his life. Saying that he 'finally died' would both mean that he finally died after so many years living with terrible illness, and it would mean that even though he was given three years to live he survived 15! Its not a celebration its acknowledgement of the fact that he did finally die after fighting for so long. Now he is at peace with no more suffering. haha does this make sense?