My .02 worth. I was in a similar situation just a few years back. Not sure I made the correct choice(s). I have twins that are 10 now. 1 of them rode the crap out of his PW50, so I moved him to a KTM 50. He did not like it at all. So I parked it and let him continue to run the crap out of the PW till he was just to big for it. His twin brother was not into the bike thing at all for about 11 months later. So I then moved them to Suzuki DRZ70's. Nice bikes, similar to CRF50-TTR50's but not sure it was the right move. Now they are on TTR110's, which they love and slowly attempting to adapt to KX65's.
Where I am headed with this, I think it depends on the direction you THINK your going. If your going to stay down the MX path, you may want to try the KTM50. I let my son give up on it to quick and now all he wants to ride is a 4 stroke that has not clutch and he can motor around in 3rd gear w/o shifting alot. I think it made them lazy so to speak. If my sons just wanted to trial ride and occasionally race etc...I would just stay with the 110's and eventually 150's or something. However, they want to do MX and I am just over the whole Jr. Trail/Sr. Trail thing. So I told them I would get them used 65's and let them get used to them. They can ride them, but they are struggling with gear selection, power-band and just the change to 2 stroke all together. They will eventually get it and be fine but I am afraid I may have made the transition harder and potentially longer.
Not sure if I helped or made the whole thing more confusing, but I was where you are just a few years ago and struggled with the same decision!