Ok...a few comments here. There are just my own personal opinions, so please take them as such.
First and foremost, I noticed the comment about "medium format", so consider this; even in digital terms, those Phase 1 backs for medium format Hasselblads can run up to $20,000 for the back alone. They're not only higher megapixel images (current models are in the 70+ mp range), they are (typically) much higher quality pixels than you see in consumer level DSLR's. Then of course you have the lenses...compare a Hasselblad lens to a common Nikon or Canon lens and most people would choose the Hassy without a second thought. There's a REASON such gear is sooooo ungodly expensive, where as your average consumer DSLR is often in the $1000 range. In essence, you're trying to compare a "working man's Chevy" to a Ferrari...they're NOT going to perform the same.
Now that's NOT to say that you can't take really sharp images with a DSLR...many people do every day. First and foremost, there's the gear...which (in this post at least), you've told us very little about. There are a few things to consider here - if your shooting digital, is your sensor dirty? What kind of "pancake" lens are you using (i.e. brand/model)? I don't consider myself a lens snob at all, however better glass can sometimes make a difference. You said you used 50mm...most people usually prefer something in the 80 - 120mm range for portraits. Then we can look at your stats...you said you shot this at 1/160 sec - did you use a tripod? Without a tripod, 1/160 can be a little slow for hand held portrait work. Depending on the brand/model of body, I might have bumped up the ISO a bit more to get a little faster shutter speed. You said f/5...that's a pretty shallow DOF for portrait work (especially at just 10 feet away). The point here is that ANY/ALL of these issues can contribute to your images being less than "tack sharp".
Now, as far as the image itself goes, as spiralout already said, if you're just looking to use these for 5 x 7 Xmas cards or something, I suspect everyone will be quite pleased. Remember, your sister's family is less likely to have the refined eyes of a seasoned photographer (unless of course they're all photographers themselves). Looking at the image here on my monitor, while I'd be reluctant to try a large poster sized print, I suspect that shot would even make a nice 8 x 10 for most people (and with a bit of work in Photoshop, you could likely push it even larger than that). It may not be "tack sharp", however it's sharp enough...and that's a distinction worth considering. Just because a given image isn't "tack sharp" doesn't mean it's specifically "blurry" either. It's easy for a lot of people to get wrapped up about the wrong thing, but unless you're planning to use this shot for the Macy's holiday catalog or something (and even there it would probably be fine), I -really- wouldn't sweat it at all. If I had to nit pick that image, the sharpness issue would be WAY at the bottom of the list...my only real nit is just the expression on the face of the kid dead center...everyone else has pleasant, fairly relaxed smiles, but that one kid almost looks like he's snarling at the camera a bit (no offense to you or the kid). For the intended use, I think that shot is just fine.
Again, just my own opinions, but I hope you find them helpful.