"For as the heavens are higher than the earth, So are My ways higher than your ways, And My thoughts than your thoughts." -Isaiah 55:9
God is just, and His way is perfect, and His judgment is better than any of ours could be. Another thing to consider is that because the souls of children are innocent, they would go on to live with Him forever, versus if they grew up, they would have been the exact same as their parents (as the past generations had proven). The Canaanites were described as literally "Defiling the land" (Leviticus 18:24-28). I understand why you would feel this way, because many people wrestle with that, but you have to understand that because God is the Creator, and is all-knowing, His judgment is just and perfect. He would actually be unloving if He just wiped them out, but as we see throughout scripture, God always gives people a chance at some point in their lives to obey Him (Titus 2:11).