As long as the playroom could be converted back into a dining room it should be fine.

Do you already have a dining table & chairs? If not I suggest a rectangle table, pushed to a corner, with either a bench or 2 chairs against the wall. Other chairs can be placed on the ends & opposite the wall. Then across the room a long 2 shelf unit with 6 or 8 baskets for toys & books. If they have more toys than that I guess you can store them under their beds.