Ethical issues aside, there's the issue of resources.

They are stretched thin with their current team and budget just dealing with Hrothgar and Viera. If they had to slap armor onto child models of the existing races too, they'd never catch up.

As for the ethical reason, also remember that SE can control what they do with child characters. They can't control what players do. And having the WOL as an adult gives them more freedom to put the WOL through hell etc.

But even if this wasn't a concern, the above factor of devleoper resources would prohibit child models for players being feasible at all. And you can't just scale down the models and say 'okay job done there's your child model' it would take more work to make them look right and fit armor right.