In an interview, Daniel Handler, whose alter ego is Lemony Snicket of the popular "A Series of Unfortunate Events" children's books, talked about why kids recognize the truth in his stories:
"I think that as you grow up you begin to look critically at the world and you note the disparity between what people are saying and how it goes. The way the books run is contrary to what everyone says all the time. In many children's books good people are rewarded and bad people are punished, and you see when you are very young that the world just doesn't go that way. I think that's something akin to irony, though it's not a textbook definition of irony. The idea that bad behavior is always punished will begin to ring false if you're actually in a schoolyard."
Of course he serves up the bad news with a huge dollop of humor, which helps, but it's a crucial point.
Today's kids are more tuned in than previous generations to the fact that life isn't one big happy story.
I've heard children's book publishers say that one of the main reasons they reject manuscripts especially for kids older than ten is that too many authors are still trying to portray life in an overly-rosy way.
(for my free report, "Seven Things that Stop You From Writing and How to Overcome Them," click here: http://goo.gl/bWjb)