I don't think you're condemning us or anything -- I appreciate the honest feedback. Founders love people who disagree with them (at least a little bit :)) -- we much prefer to hear what's wrong with our products that we can fix rather than hearing about what we've gotten right.
I think it's perhaps a little disingenuous to suggest that kids lack the intellectual sophistication to evaluate the consequences of using our app whilst simultaneously suggesting that they are fully capable of evaluating all the dangers in the world that they inhabit: if they don't need the supervision of parents, then surely they can figure out what deal they're taking? If they can't make that kind of decision, I'd argue that they probably do have some growing up to do before their parents could responsibly let them leave their supervision.
I say that not only as an interesting intellectual puzzle, but also because we've spoken to kids about this as well as parents. There's definitely an age where kids really, truly can't evaluate what's going on. I don't disagree. What we've found though is that mostly parents don't trust those kids with the kinds of phones they'd need to run this software (even if we did port to Android et al). Indeed, I don't think we've spoken to anyone giving their kids a phone of any kind at age, say, 7, and these kids are under basically constant adult supervision. At the other end of the spectrum, by 16, kids know exactly what's going on, and they're of an age where they could have the kinds of phones they'd need for this.
I should point out that these are not numbers I'm pulling out of the air, but summaries of actual conversations we've had with actual kids.
The question is really whether there's an age in between where there's a legitimate need for supervision, yet they're responsible enough to be trusted with a phone, and where the children are wanting to start exploring the world and gain some freedom -- it's typically going to be the kids pushing to get more freedom, rather than the parents willingly thrusting those freedoms onto the child.
Our position is that there is such a transitional period, when a child goes from basically constant supervision to basically none, and that parents have a legitimate need to know where their kids are. It will vary for different kids and different families, but I do think that easing both parents and kids through that stage with an app like this is a net win for all concerned: if having this app gives parents the confidence to let their kids go farther afield, then we're accelerating the development of the child, rather than stunting it.
As for why YC is funding us, we ask ourselves that every day! :)