I don't really like the damage that ATVs inflict on the land. While working for a short time as refuge manager at Cape May NWR, it was a constant issue that the staff dealt with, with little ability to really deal with it. These things can rapily trash a forest and turn it into nothing but a eroded dirt race track.
However, a pedal powered version, used in the right places is intriguing, and maybe a way to engage kids to get out... see it here.
The debate is ongoing about mountain bikes in wilderness, and certainly the addition of a pedal powered ATV would sharpen the debate. But can the damage be balanced by a larger number of kids engaged in outdoor activities?