Not that I'm a Kardashian fan, but this is smart. Either they can sell cheap stupid stuff and make tons of money because lots of people like buying cheap stupid Kardashian crap (krap?), or they can sell just enough to keep the trademark active and legally prevent others from cashing in on on their child's name (which many would definitely try to do).
When you're a poor child, all you have to worry about is your parents hijacking your social security number and destroying your credit forever before you're even old enough to know it exists, which in present-day America essentially condemns you to a life of permanent poverty.
When you're a rich child, all you have to worry about is your parents hijacking your name and face as a brand and preventing you from ever having control over their use. I mean call me cynical, but I have my doubts that "Kardashian, Inc" (or whatevertheheck owns the brand) is going to be magnanimously giving Psalm West any interest in the brand as he gets older, to say nothing of completely signing over the rights once he's 18 - especially if the brand ends up being a money-maker. That's just not how capitalism works, yo.