Freud would certainly agree with your concerns but disagree with the notion that children do not have an interest in sex. I think there is a sense that children would not be able to integrate certain kinds of detailed information about sexual life but I'm not sure why we would want to conceal the facts about reproduction. Adults clearly have their own interests in imagining that there is a non sexual time in life- a time of innocence.
Read another response by Gordon Marino
Why is there such a taboo in society about children and sexual content? It seems quite odd to me that we attempt to hide something so fundamental from children. Is it really the case that children, even very young children, are somehow harmed by knowledge of sex, or that they are too immature to comprehend the material? Isn't it more likely that lack of knowledge about sex could lead to unsafe experimentation in early adolescence (or even before, for especially precocious children)? Children seem to have a natural marked disinterest or repulsion about the nature of sex in any case; does hiding even moderately suggestive images and language, dressing up natural processes such as childbirth in misleading euphemistic fairy tales, and cultivating a general atmosphere of awkwardness and embarrassment when discussing sex around children actually help anyone? For my part, natural curiosity caused me to gain a working knowledge of the mechanics of sex from a biology textbook at age 7, so perhaps I am simply odd.