I hate to be the one to say it, and I'm probably going to be hammered for this, but he may need to be put down. In any case, you need to get him away from kids and strangers. Permanently. At best he's a lawsuit waiting to happen. At worst he'll end up putting some kid in the hospital. You might as well have a loaded and cocked gun laying around in the open.
You are dead on right. No dog is worth a killed or injured child. Put him down and find a friendlier dog to replace him.