Republic Wireless Relay Is a Google-Powered, Walkie-Talkie Phone for Kids
They keep trying this
Most likely the reasons are simple. Very young kids aren't responsible enough to carry the thing around and not lose it, especially when playing outside. Older kids want a real phone.
Also, now even very young kids play on tablets and phones, even if they are wifi only and parents can easily send them messages to those devices. Add in that parents today simply don't let kids roam nearly as much as in the past to the point kids don't even walk down the sidewalk and knock on a friend's door without scheduling it first, so who...