No, it's not a lost battle. Unfortunately, their ESTA applications likely will be rejected outright because of their past B-1/B-2 visa application denials. But it's still possible that they could get B-1/B-2 visas. They should apply again but given their previous denials, they should consult an immigration attorney.
Just to make sure I understand the recommendation: US based immigration attorney for a tourist visa? (I don't want to sponsor them and they have no intention of moving here - they just want to visit and see us & the kids).