I get the network effect of having all the other kids with phones.

I don't think the network effect is the only factor to consider here. Kids are at real risk of social ostracization and bullying by their peers if they do not have a smartphone. And that's dangeous in of itself.

I'm not sure if the dangers of being ostricised and bullied are more significant than the dangers presented by owning a smartphone. Either way, I don't think it's a simple decision for a parent to make.