First of all, I think it should be noted that the Bibles belong to your children. Confiscating the Bibles and disposing of them without consulting your children is rather disrespectful of your children’s growing maturity and the fact that these Bibles were given as gifts for a special occasion. It may also be that these Bibles are presentation copies, with personalized inscriptions to your children in the Bibles (which would make the Bibles inappropriate for giving to someone else).
If the Bibles are not personally inscribed, you could suggest to your children that the Bibles be donated to a Protestant church for Protestant children who do not have a Bible. Including them in the decision to donate would help them learn how to handle well-meant but unusable gifts. If the Bibles are personally inscribed, then you might tuck them away with the children’s other special mementos, and buy the children Catholic Bibles for “everyday use.”