Is an electrical lockout a good way to protect children in a workshop?
Locking the breaker is certainly an option (probably a good one).  I would consider it a hassle to have to unlock the breaker before work and having to relock when done.  However, I'd rather do that than have my child lose a finger.
In addition to shielding our children from things it is important that we teach them to respect the shop area and to respect the tools in the shop.  One of my children is very impulsive so she'll  grabs things without thinking.  As soon as she does this in the shop she is sent into temporary exile (for a week or so) and is under no conditions allowed back in the shop.  This worked for the other kids, and it is working for her.
Additionally, I've found it to be helpful to put on demonstrations of why we respect our tools.  Kids love visuals.  Get a 1-inch dowel and wack it on the ground a few times then ask them which is harder, the dowel or their finger.  They'll say the dowel.  Then show them how quickly a circular saw cuts through the dowel and ask what would happen if that were their finger?  You don't want to terrify the kids, but at least make them aware of how serious this stuff is.
One more thing I've done with the kids is buy them their own tools, toolbox and all (second-hand stuff).  They know that those tools belong to them.  If I want to borrow one of their tools, I ask.  This teaches them to respect others property.  It also teaches them to take care of their tools (Oh, you broke your screw driver using it as a chisel?  Sorry, guess you will have to buy a new one).  They also know they don't need permission to use their own tools so it gives they something to do/use while working with me.