If you put the pavers on craigslist someone is going to be very happy...!

But seriously, I don't think it's crazy at all. Primarily, such a patio is not "period appropriate" so to speak. Terracing might not be either, but it would be more believable. Boys playing safely on top of terracing is another issue, though. I think I'd be thinking fencing of some sort, just to mark the edges.

KarinL
PS If you don't already know of it, the Old House forum might be of interest for project advice.

Here is a link that might be useful: Old House Forum

Your idea isn't crazy, BUT I think it should be near the bottom of your to-do list. Softening the look with planting beds will change it a lot. The boys will be able to play there a lot. I can see a fleet of big wheels, etc. out there. Fencing an area for them would be my priority. I assume they can't play outside alone now.

Marvy fun house.

I agree with Rosie. I would put up a fence along the side, and clear out what appears to be an overgrown shrub border. Then plant grass there, that will give the kids some place to play in the short run. Also give that part of your yard privacy. If you don't want a fence, plant an evergreen hedge of arborvitae or yew.

One of my good friends tore out a lovely concrete block patio recently. It looked nice, but she said it wasn't pitched properly, so it flooded, and the blocks were uneven and her kids/toddlers were always tripping and falling on it. They replaced it with pea gravel! She said they love it, and they have made it into an outdoor play area for the kids.

I tore off the huge, very nice deck that was attached to the back of my house. Like you, at first I though, how nice, I'll bet I will be out there all the time. That was in the winter when I bought the house. But in the summer I hated to be out there. It had southern exposure so was hot as blazes, I had a hard time getting plants to grow in the porchboxes, constantly looking at the railings made me feel like I was in jail, and I was up above the whole row house block when I was out there putting on a show for everyone. My friend once said, "All you need is a steering wheel out here and you can be Captain of the Neighborhood." The view was the tops of cars, roofs and my neighbors heads. I bit the bullet, put an add in the paper for anyone who wanted to tear out the deck to buy it, and installed a ground level patio. I have loved it.

It's too bad though, I have total patio envy of you. That's why I'd make it a priority to put up a fence and clear out that area along the sidewalk. You may feel differently about the patio then. Also, you won't regret having that fence!

But by all means, if it's not working for you, redo. I just wouldn't make it a priority due to maybe having limited funds and wanting to do what is most important first. If it aint broke, maybe don't fix it before other more important fixes.

Here's what I did to my yard.
Deck before, a hodgepodge:
{{gwi:29622}}
Patio after, a pleasant place to enjoy the view of the GARDEN:
{{gwi:29623}}
And here it is today, my secluded oasis in the middle of the city:
{{gwi:29624}}
The folks I bought the house from must have been kinda disappointed since they put in the deck and I'm sure it was a lot of work, and apparently they enjoyed it. But it didn't fit in with my desired use of that space. Same goes for you, even though it may be dramatic, you'll be happier in the long run with a yard that is designed for what you want to do with it. However, I would caution you to think long and hard about what you really want in the long run. Too many yard landscapes are not planned for the long run, just what the homeowners want today. It's expensive to keep ripping out stuff and redoing, albeit sometimes fun, lol!