I don't buy that. People are sensitive to certain images. I can't stand to dental surgery videos either and definitely I don't think children would get any benefit from watching such material but that doesn't make dental surgery something people shouldn't do.
That being said as a child I've been exposed to animal slaugther on farms and I still eat beef, chicken and pork(very, very rarely). I don't think seeing how the animals are killed makes you vegan.
I don't enjoy watching animals being killed though but we are mortals and animals are mortals too so in the end it makes little difference if we kill or do not kill animals. We have the same end destination. I think this makes us less sensitive to killing animals and even our own. The difference between us and the animals is that they lack enough intelligence to produce anything meaningful(i.e technology, innovation etc) during their lifespan thus the reason why their scope in life is to become good food for us.
We should minimise the pain inflicted upon animals and create better living conditions. It's good for animals and it's good for the consumers as well. Legislation already exists in Europe and will only get stronger.