It seems I'm a bit late to this thread, but I figure I'll chip in my bit. I'm currently 20, but back when I first started playing, around 14/15, I was in a band. Guitar, Bass, Drums, Girl singer. We had a lot of fun for a while, left to our own devices, playing some generic pop/rock of the time. However, eventually the Girl's mom got involved. She started showing up to all the practices, watching us, making suggestions, telling us to play certain songs that played to the girl's strengths. Eventually the guitar player and I got sick and tired of the mom's $h*t and called each other up, both expressing displeasure and wanting to explore different music (me blues & psych, him jazz and country). We were both quite clear that the thing that did it was the Mom, she was too overbearing. Him & I have subsequently played together a number of times, and I went on to play with adults and playing in Bars. The Mom has continued to manage her daughter, whose now got some sort of recording deal and got into the whole alt/country thing, which is really cool for her. The guitarist and I have backed her once or twice since the split, but any serious work with her never worked out due to the parental supervision. So my advise to any parents is to step back, support your kids, but don't be overbearing or push it on them.
Here's another example: Local Band, always kind of a kid band. You know, started playing when they were like 11 or something, couple years younger than me. Anyways, there was always the one band mom, really pushing for them to practice and do shows. Quite prolific. They were constantly practicing and had lots of shows. They were also simply horrible. Like, just couldn't keep a tune. Off time, out of key. The line up was constantly changing. The only kid in it now (they're still going, I guess they aren't really kids anymore) is the son of the band mom. Everyone else left at various points and were replaced because it was too stressful to deal with the mom. All the best bands and musicians my age that I know voluntarily picked up their instrument, and their parents supported them, but didn't try to control them. By continuously riding kids about music, they'll start to see it as a chore, something no kid likes. I know I felt that way when my parents tried to get me to play violin. Looking back, I really wished I'd learned it, but at the time it was something my parents were trying to make me do, like sports and stuff, and I pushed against it. When I showed interest in guitar and bass, they encouraged me, but didn't push it like violin. And guess what I'm still doing today?
In the era of electronic entertainment and high fructose corn syrup, if kids are left completely to their own devices, they will turn themselves into mental and physical Blobs.
I don't think this is entirely true. Sure, maybe not as MANY kids will get into music and instruments, but there will always be kids innately drawn to play music. My family has a history of artistic tendencies (Dad paints, Grandfather worked in film, other ancestors also paint and such), so I was surrounded by a general sense of having an outlet to create and express myself. But I was never sat down and told "here, play the guitar/bass". I asked my parents for a guitar because I wanted to learn, on my own accord, to be like the musicians I was listening to (Chuck Berry, mostly). Same thing with most of my music playing friends. Grew up either in a creative environment or with musicians in the family, and chose to pursue music on their own accord. So not all kids will just sit around and veg out. I'm sure that somewhat has to do with the environment you grow up in, but some people are just naturally inclined to pursue music.