My 7 year old rides a horse (not a pony, he is a little over 15 hands) and when she was 5, her legs kinda stuck out to the side on him too, but now she is better suited and can wrap her legs around him better.
That kid's legs stick out just like mine would if I had attempted to ride a huge horse like this.....
Imagine how hard it would be to get your legs around that one?
I gotta admit I was impressed with her, tho I do think she would have done better with a pony so she could get her legs down better. They shudda put her on a real small horse or a pony her size, rather than that big horse. But that wasn't her fault, she stuck in there (literally) like a soll-jah!