One flaw that I don't really understand the reason for is that you can't load a 7-day Travelcard onto a visitor Oyster card, but you can do that on a regular card. (The discounts aren't really all that valuable--see below.) Why does that matter? Well, an Oyster card with a Travelcard loaded onto it is very flexible. You can buy the Travelcard only for Zones 1-2 and use Oyster card funds for journeys outside those zones. Also, if your journey is longer than a week, you can simply use pay-as-you-go for the days outside the Travelcard and you'll still get the daily cap. This is particularly useful on the first and last days, leaving or returning to Heathrow--you would otherwise have to get a Zones 1-6 Travelcard for everyone (horrendous), or pay cash fare for the trips to and from Heathrow (equally horrendous). (And BTW, you have to be a Brit to get a senior discount.) Here's a link to the clear-as-mud TFL webpage that attempts, failing miserably, to explain all this:
https://visitorshop.tfl.gov.uk/help/ticket-comparison/
It would be feasible to get everybody a regular Oyster card and also a 7-day paper Travelcard. But that's two things for the kids to keep track of, rather than one. There is one advantage to the Visitor Oyster card if you have kids--you can stop where a Tube station has a manned ticket office (most don't) and get their cards validated for half price trips (ages 11-15). That may be better than the Travelcards. It depends on whether the total cost of all the trips your kids take (at the 50% discount) will exceed the cost of their Travelcards for those seven days. Travelcards have a fixed cost. It would be hard to hit the daily cap on a kid's Oyster card.
Of course, it may be too late to get a Visitor card anyway. You can't buy them in London.
IMHO the Tower of London, the London Eye, the Wax Museum, Buckingham Palace, etc. are all overrated and ridiculously expensive tourist traps. The only "biggie" I would ever consider bothering to see is Westminster Abbey, and that's usually got a mile-long queue of tourists snaking out the entrance and down the road. Really, none of that stuff is worth doing, even at half price. Also, you'll burn up a LOT of your London time seeing those things, which is a shame. There are so many fantastic absolutely free experiences available. For the money and time you spend waiting in line to see the Crown Jewels (whee) or to ride on the glorified Ferris wheel (double whee), you could have a fantastic dinner or see a play or concert. Of course, given that you're bringing teenagers, all that may be out of your hands anyway :)