It's simple. If this game at any point makes players feel bad and not have fun, it's doing a bad job. Games are meant to be fun.
Regardless of how many people might enjoy a certain element, if it has a lot of potential to make players feel guilty or feel bad, they should come up with another solution. You can have fun in other ways. It doesn't have to be killing goblin kids.
I felt bad, and do feel bad each time and have to talk myself into it being okay. Others don't even try to talk themselves into it being okay. They just feel bad.
So, that's not good. They should come up with another solution.
Oh, wait. They did. Not being sarcastic here, but it just came to me. Set the attack to knock out. Then when you 0 the goblin kids, they are unconscious. Not dead.
Ah, but then again, here lies the real life dilemma. What is more cruel? Knock out the kids but kill their entire tribe, or just kill the kids with their families so they don't wake up and discover their all alone?
I suppose you could play total pacifist and kill no one, but that would solve nothing. The goblins are hard core fanatics of the Absolute and just love to kill. They're not going to leave people alone if you let them live.
Hmmm. Yeah. Just remove the kids from the setting and it wouldn't be so bad. End of story. In order to save Halsin, you are confronted with killing kids, and that just presents enough of a conscience dilemma for too many. For the sake of conscience, it should just be removed. It's not fun playing a game that makes you feel guilty. Period. As long as you have a legit choice, that's not a problem, but with the goblin kids, you have to kill them or they bring reinforcements, and knockout is more cruel than death.