This is a video game we're talking about. I shouldn't have to point this out, but video games aren't like real life. FF8 lasts about 20-30 hours, in which time an entire world is introduced, experienced and left behind. If you want to think about the game to this level of detail, you'll have to accept that assumptions will have to be made about it. You simply don't know enough about the FF8 world and its inhabitants to be able to find all the answers to every single question that could possibly be raised by a theory.
Though If I could boot up my FF8 game and walk Squall down to child protection services and ask the NPC receptionist for his and Seifer's adoption papers with their real parents names on them, I would.
edit: orphanages don't actually 'adopt' children, do they? xD