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No major game release can allow you to kill children, or it becomes "the child-murder game" in the press. Knowing game designers, I'm sure they'd like nothing more than to allow you to kill tykes, but the corporate types won't let them. For very understandable, primarily economic reasons.
Nonetheless, I still have a little bone to pick with Ubi for using children as the requisite annoying beggars in ACIII. It's kind of a dick move to make the beggars in this game unkillable. They should have made them killable adults, as in previous games.
(For the record, I see nothing morally problematic about killing a representation of a child in a video game...or doing anything else in a video game. Because it's a video game. It is not real life.)
Different thought, but on topic. I believe they found leftover code for children, dogs, and cats in grand theft auto iii. they decided to take the kids out and i believe peta had a hand in the removal of the dogs and cats.