The combination of cars and children is already heavily regulated. Also, you can't ban cars without destroying the economy. You can ban dangerous toys. The lawn dart ban didn't cause an economic catastrophe.
You could make the speed limits 5 mph and 20mph on freeways/highways. Could also make kids wear helmets while on the street, or even better yet at all times. I read somewhere 10 or so kids die in the bathroom from slipping, how many would have survived if they were wearing a helmet? Full ban on peanuts would save a couple kids lives a year(http://en.wikipedia.org/wiki/Peanut_allergy).
All these things may seem ridiculous, but doing so would have greater impact for child safety than banning rare earth metal balls. Children lives would actually be saved.
Lowering speed limit saves money(Gas), but thats debate for another thread. Banning thing costs us our personal freedom. Also personal responsibility goes out the door. Reason why we can't have things like chemistry sets like our parents had.
The only personal freedom being lost here is the freedom to market "any aggregation of separable, permanent magnetic objects" as "a consumer product intended or marketed by the manufacturer primarily as a manipulative or construction desk toy for general entertainment, such as puzzle working, sculpture, mental stimulation, or stress relief".
The government isn't banning magnets, just like they didn't ban darts. You can own magnets. You can own small round magnets. You can own them in sets of 200. You can even sell them! You just can't set up a business marketing as a toy something the CPSC believes will needlessly endanger children.