I make it a point to stay away from pediatric care as much as possible (I'm more than happy to initiate CPR on your kid, but I want nothing to do with his health care! lol), but I can't help but think this approach is WAY too radical. I am a supervisor in a long term care facility and we deal with issues of immobile patients every day. If it were ME, I would never have even THOUGHT about altering my daughter's physiology in order to keep her from growing to a size of 5'5", 125lbs. Instead of spending all this money on hacking up the kid, they could have spent a fraction of it on lifting and transferring equipment and some instruction how to properly care for an individual who is totally dependent on others.
I know that may sound like an oversimplification, but the fact of the matter is that many hospitals and medical facilities are becoming "no-lift" these days. I supervise nurses and nursing assistants who are little ladies in their 50s, and they can quite easily bathe, transfer, and care for 250lb male patients. If the difference between 4'4" 70lbs and 5'5" 125lbs is all that significant to this family, then they have yet to be educated on how to provide care for such a patient.
I don't really want to debate the ethics of this situation, but the more important factor here is liability. The two go hand-in-hand, obviously, but clearly with the family so gung-ho about this strategy there is little or no liability on the part of the hospital.