There is no moral dilemma

So what you're saying is that there's no LOGICAL dilemma. The dilemma is still very much a moral one. Maybe you haven't noticed but morals are very often not logical but yes I agree with you on that it would be illogical to disagree with his terms.

Actually, I think the best decision was to stand up against Linoge, even using a purely logical and self-interested viewpoint.
After seeing Linoge's supernatural powers, appearance, statements, etc, it becomes clear that he is some sort of demon (Legion). This would make even skeptical, stubborn atheists (like me) realize that there is God, Heaven, Hell, etc, all the Bible stuff. So, meeting Linoge makes us sure we have an immortal soul, that will go somewhere after our brain dies. We can then describe the two options like this:
1 - Accept the deal, send a child to a demon (which would probably damn his/her soul), live some decades on Earth and then spend eternity in Hell.
2 - Deny the proposition, fight for your life along with everybody (with pretty bad odds, I know), and have pretty good chances to cross St Peter's gate and spend eternity in Heaven.
I fail to understand how someone can go with option 1, even more people who were already strong believers before the ordeal.

This is 1/2 the reason failed for me. Firstly, it made no sense that a being with seemingly unlimited, undeniable power has to go through a silly ordeal of waiting on a town vote. Second, I thought the great "moral dilemma" was a poor one. The whole town gets wiped out, or one kid goes to live with some evil tutor who implies it will be to give the kid the same power. The premise is paying a ransom is evil.

That being said, if I was a parent I wouldn't have taken the deal.

Amy: I swear to God...I swear to God! That is NOT how you treat your human!

I thought Mike Anderson was a hypocrite...earlier on in the film he says he believes in what Linoge can do...and yet he is willing to sacrifice an entire TOWN just to "save face"?
That has to be one of the worst pieces of storytelling I have ever seen, particularly when tacked on to an otherwise solid and well-written build-up. Mike Anderson as a character is flawed from a plot standpoint. He KNEW what Linoge said was the truth about a town full of scumbags (who were not much better than Linoge!). Therefore, giving one of the children up for adoption (and that's all it is, an ADOPTION) to a being of essentially the same character as the townspeople, would have been the best choice to make.
All in all, I don't buy him as a character.

I would fight. I would NEVER put my survival over a child's soul. The townspeople should have unified and fought Linoge in my opinion. Yeah the odds might not have been in their favor BUT there is no way I could personally live with turning ANY child over to a complete monster! This is still my FAVORITE King adaptation to this day.

It boils down to this. Mike said it all with one sentence "we cannot give one of our children to this monster"

If they had all stood up to him, odds are Linoge would have just left them alone.

He couldn't even control one person to kill another (Billy). If Billy could resist him, then he couldn't make them all kill themselves.

no, i would have rather die and have all the town die than to agree with that monster. I guess if I wasn't a mother them I would say, yeah give him a kid because it didn't affect me but I am a parent and I would not be able to give a child to that monster