I understand why you are all saying 'keep her' BUT children are unpredictable... What if one of the kids fell on her?

I would rehome her to a non-child family OR restrict the kids access to her, for her safety as well as the children's.

I agree that it wasn't the dog's fault, but there are plenty of dogs out there who wouldn't attack even if someone did fall on them!
That is the kind of dog you need when you have children, because accidents happen.

JMO.

(poor dog, and poor man! talk about a crappy accident!)