AFAIK IANAL dual citizenships aren't legal(or maybe not legally recognized would be more correct?) in the US to begin with.
The US position on dual citizenships is generally to ignore them. So as far as the US government was concerned these kids would be solely American. They wouldn't get in trouble or anything.
while our son was born in Canada and I signed to forms to allow him to get a US passport. In hindsight I wish I had never done this.
If you were married at the time of your son's birth, then he was a US citizen regardless of what forms you did or did not fill out. There was nothing you could do about it. So don't feel too badly.
The dollar is not an especially strong currency.
While I agree with the gist of your posting, the dollar is in fact the strongest major currency in the world at the moment, with the possible exception of the Swiss franc.
US consular assistance is pretty worthless. They do the bare minimum and charge up the ass for everything else.
As a dual US-EU citizen, I never travel on my US passport or deal with the US overseas when I can help it, because it's a waste of time.
Also, as a EU citizen, I have the benefit of recourse to consular services from any other EU nation if mine isn't available.
The US isn't the only country that evacuates its citizens, but as far as I know it's the only one that will send you a bill afterwards. I'd much rather be evacuated by the French, for example, who have a far stronger record in overseas citizen protection.