That's a really beautiful story of the cycle of life! And, in a sense, an object lesson for your kids as well, on how nature works. Indeed, the bird made the perfect conclusion to the story.
I'm reminded of being quite little, and having my mom explain the cycle of life to me after we'd watched a nature program, and a pride of lions had killed a zebra... and I was upset by that. "When the lions catch the zebra, it's good for the lion, but bad for the zebra." But it's also the nature of things, just like with the gnat-dragonfly-bird cycle.
Beautifully told, too!