Doesn't this depend a lot on what you define as "poverty"?
If you ask "is sending your children to work better than letting them stay home and starve?" the answer is Hell Yes. Of course, that raises the additional question of why you decided to have children that you can't support.
Before the industrial revolution, child labor was the norm, with most children doing at least some work in the "family business" from a very early age--if they didn't work, there wasn't enough food to provide for them. Even then, if the weather changed or a crop disease got loose, many of these children starved.
With advancements in productivity, it became possible for adults to support children without those children having to work. (Plus, you know, birth control really helps with this problem.) That's why we don't have child labor now: it's not necessary.
As for Nike: companies have to make money to stay in existence and they probably can't afford the bad PR of associating with child labor--even if it's the only thing keeping those kids from starving. They were intelligent enough to cut their losses; that's hardly a black mark against them. The only wrong in this situation is the people who condemn a practice without bothering to understand what it is or why it comes about.