The version of the "butterfly" quote I remember was more like, "Ballets are like butterflies. Last year's butterflies don't exist." Reading that, and knowing his company's repertory as Helene points out, I thought, Balanchine has the nicest butterfly collection I've ever seen.
But he did live to see some of his ballets performed without his supervision, for example ABT put on an Apollo he asked to have stopped or to let him correct. (It was already so old there was no question of his having any legal right to it anymore.) Arlene Croce had catalogued the gross errors in her review, but by the time they brought it to Chicago, he'd corrected them.
As to whether he cared, I think that's a tough one. Time for a re-read of Taper on the end of Mr. B's life. He did, after some thought, parcel out the rights to them to a whole list of people in his Will.
But few people have staged his works at NYCB besides Martins and Dunleavy, AFAIK, although Verdy was there for a while. Farrell was limited to one ballet, Tzigane; that's what she complained about, finally, in 1993, and that was how she got fired from NYCB the second time. But their whole way of dancing changed in the mid-80s, it looked to me. Sometimes the steps and gestures seem intact, sometimes not...