I think when most of us are suggesting to continue to socialize him, we aren't necessarily suggesting you continue to use the neighborhood kids for this.
My 'world' is alot bigger than my house/yard/street. So I have also made this larger 'world' the one my dog lives in. And that is the one I socialize my dog in. And it's vital I do this in a positive and non-threatening and overwhelming way if I think my dog has an issue with something.
For instance, a siren on a police car was set off as the vehicle passed my puppy and I when we were down town and she was only about 6 months old. Well, poor Elsa FREAKED in a major, fast and completely unpredictable way. Almost jerking me over and off my feet, as well as almost getting the leash out of my hands as she wanted to get away.
I did NOT correct and add to her fear and panic. Because that was what the reaction was, fear. Frankly, she was in such an overload it wouldn't have shocked me if she had bit me in the instanteous first 'I HAVE TO ESCAPE' moment. She did not. I have learned that adding corrections and punishment to a fear situation will only make it worse.
To get her over this, did I go to the police station, have the police cars drive around us with their sirens activated? NO! Too much, too loud, too close, too fast, to overwhelming. NOT the proper way to socialize and get her over her fear.
Instead I worked out a plan with my trainer, and with treats, clickers and the positive methods we went over to get my calm and happy Elsa back, we worked through the problem so now she does fine.
Positive training gets rid of fear in our dogs. Happy correlations with situations (like food treats/rewards with kids around) do far more to keep a dog relaxed and more forgiving than a correction or verbals in the same situation. Use of distance. Timing for the rewards. NOT COMPLETELY avoiding situations but having a good plan in place to work a problem thru.
DOG TRAINING AND CLASSES to make yourself more a leader to your dog so they relax and know you will take care of anything that comes up (like a kid coming past?). And the classes and training that give you confidence to take your dog everywhere with the knowledge you have the skills needed to do so.
Frankly, my dogs are almost never out with a bunch of loose and running kids. It's my job to manage the situation and world so it's one my dog is happy and confident in. Just like I wouldn't let them run in a field of loose horses (don't trust them, the horses), I also wouldn't let a bunch of kids run around uncontrolled (don't trust them either). And my dogs do fine with kids. Calm kids that listen and don't run around like maniacs. And if I can't control the kids, then we can leave.
As I mentioned before, it's a big world I live in. So I can find safe areas and places for my dogs and I. While I work with great trainers/classes/seminars to work thru any issues my dogs and I may have so my world can expand and be even bigger.
I learned a long time ago with this dog thing, that if the methods I was using with my dogs weren't improving the situation, and maybe it was getting worse. I need to STOP doing it, and find a new way. And I now get real help from the trainers/classes/instructors who have worked with dogs for years so have actual experience and guidance I can try.
Quote: I cannot allow this to happen again, so my options are to not walk him while kids are outside (live on a dead end) or unfortunately put him down.
I could list about a dozen different options for you and your dog, and none of them would be to put your young dog down at this time. And if you are over your head with training this dog, so what? Every dog is different. Getting help isn't something you should be ashamed of getting, or avoid getting, but WELCOME.