This is exact argument that people use to advocate making marijuana illegal. Its the classic "please think of the children" argument.
Bad argument, shame on you.
It would be a good argument if CSGOlounge came with an age limit the kids then circumvented, but it isn't. It's completely without rules and regulation; Legal weed would not be, and that's what makes your example a bad argument. So, in short, one bad argument doesn't mean all arguments of that kind are suddenly bad.
Making an action illegal with threats of force because you don't like some anedotal stories never works out for the best.
Who is advocating for the use of force? Just use the legal framework available. I realize they're foreign, but they're quite directly enabled by Valve and that's a US company, so I'm sure there are ways.
If we are going to make gambling (skins or money) illegal because its dangerous to kids we might as well make swimming pools illegal.
Let me ask you something, because I'm beginning to feel like you're missing the point on purpose: Do you think children should have access to firearms? If you do not, do you think that means firearms should be removed from society, or do you think that maybe we should force businesses to not sell firearms to children?
Similar question could be posed with cars and drivers license.
Here's what you need to know: Lots of things are regulated for a number good, or bad, reasons. Nicotine is regulated, and there's real data about why: Most smokers start young. Why? Because young people are stupid and impressionable, at least relative to adults. Thus by MAKING IT HARDER (not impossible) to start the habit when young you directly impact how many smokers there will be 5-10 years from now. Similar reason was behind the move to establish "Plain Packaging" and ugly-ass pictures on the packets of smokes, because while a hardcore addict won't give a shit, somebody starting out might.
Gambling is also regulated and age-gated, because "we" feel children shouldn't be exposed to it for similar reasons as with nicotine. CSGOLounge made "legal" wouldn't mean its removal, it would just mean you're age-checked and blocked from participating if you're from a nation where betting isn't legal.
This isn't a new concept and you may disagree with it, but you aren't right just because you keep talking about preserving freedoms, that's not an agreed-upon best way of doing it so don't pretend like it's the magical solution.