BBoJ and I head up CrossFit Kids HQ. We spend most of our free time working with kids or researching exercise related topics regarding kids. Here is the deal. You are both right. First we believe kids should lift weights. Properly supervised the research shows this is very beneficial to kids. That being said kids get stronger through neuromuscular facilitation and not hypertrophy. In other words kids get stronger by moving small loads many times through the proper range of motion rather than overloading their muscles and causing their muscles to hypertrophy. It is not necessary to expose them to the risk of heavy weight training to get them stronger. One of the sign of a good trainer is the ability to choose the proper/smallest stimulus necessary to get a training adaption from the client.
I would highly recommend the following reading:
Inherent responsibilities of training children and teens
CrossFit Kids Magazine, February 2008
Kids and Weightlifting: Dispelling the myths