The times I have fished with kids from a boat (which is not a lot) their concern was that they may be pulled over the side when hooked up.  For that reason I wouldn't let them anywhere near an electric reel.  If someone accidentally tweaks the drag, good night rod and reel.  Stick with the el cheapo egg beater reel and glass rod and teach them technique imo.  

Edit: teach them technique at home.  Put some water in a bucket and tie it to their line.  Then get them to lift the weight off the ground using technique. As they get better increase weight.

 I'm with Alan. Teach them the right way now and they will thank you for it later, so will the bank account . My kids learnt with the Penn 330gti combo. Cheap and still going 20 years later. Easy to wind as they are a lower ratio than a lot of other reels. 

Just tie them to the rails just in case they go over. The rods that is not the kids

Spoil them if you can, I think if it helps and keeps them interested then go for it,

After all what you are looking for is an interest that is both healthy and rewarding for them and also long term fishing buddies for you.

If this reel will help in that endeavour simply don't hesitate, as you will be busy looking after them and passing on your knowledge you won't be doing much fishing in the early stages as it the kids you want to catch fish, and when they do the rewards are priceless.

As Alan mentioned above if they play with settings it could be all over, however simply use a rod leash and you will be fine.

Using an old alvey reel, a bit of cord, a stick and a very energetic kelpie dog to learn how to pump and wind. The antics of the dog kept the interest up and the way he would move around and shake his head now and then mimicked a big pinkie very realistically.
Worked for my kids

 Interesting views but here's where I stand. Everyone knows the better the outfit the easier it is on the person to lift fish. The old (Penn 330gti) certainly taught us that. For the kids I find they loose their ability to hold the rod with a fish on when they go to grab the reel to wind, hence two hands on the rod are better than one. Maybe we all learnt with the old way but with what's around today why not utilise it. Why stick with the old ways. Maybe I'm spoiling them but at 500 bucks it also may make a better investment to get them hooked on fishing even more and not struggle.  

 I think the age of the kids is a pretty big factor here and also the boat they are fishing from. 

My 5 year old fishing from my dingi shits himself when he gets a Dhu because the weight is over whelming.

Certainly doesn't put him off fishing though when he hands his rod to dad and dad lands a dhui that he then claims.

When he's handing the rod over he hasn't even attempted to wind, both hands are on the rod white Knuckling it  probably feeling like he's going over board and will be on the next iceage movie.

He has no worries winding hezza up the sand.

Doesn't have to be 10kg Dhu to keep them interested.

I'm sure in the coming years his confidence will grow substantially. I'm hoping that coincides with me upgrading my boat to something he can safely and comfortably stand on while trying to fish/wind in his own Dhu.