My thinking is similar but I'll word the reasoning a bit differently.
A parachute is designed to create *drag*, which slows a rocket (or whatever the parachute is attached to) as air moves past it. This air movement past the 'chute is typically created by the object it is attached to "falling" through the air. Assuming no breeze or wind, a rocket falls vertically and the drag force vector of the chute acts in a direction 180 degrees to the direction of travel.
A kite is designed to generate enough *lift* to keep itself aloft, at a bridled angle of attack to the wind direction. For simplicity, lets say the the wind is blowing parallel to the ground, so the net lift force vector (when the angle of attack meets its balance point so that the kite stays at a stationary altitude) is 90 degrees to the wind angle. Basically, the lift the kite generates counteracts the forces of gravity until those two opposing forces acheive balance. Now, not all of the forces that the kite puts on the line are 90 degrees to the wind; the remainder "feels" like drag and translates to the kite flyer as "pull" on the line. Different kites of the same flying surface area will fly at different angles of attack with differing amounts of line pull depending on their ratio of lift vs. drag (among other things)
You can adjust the angle of attack of a kite (by adjusting it's bridle point) to minimize lift and maximize drag (thus optimizing it as a chute) but then, if you tried to fly the kite, it wouldn't rise into the air; you'd just get exaggerated pull on the line and the kite wouldn't rise.
Now, with that in mind, think of using a kite as a chute on a rocket falling from apogee on an otherwise calm and windless day. You have to rotate your point of reference in considering the forces on the kite - the rocket falling vertically creates the air movement that the kite sees (so the wind direction to think of would be blowing vertically from the ground up.) This means that the "lift" is perpendicular to the direction of travel or air movement, which means that the lift direction would be *parallel* to the ground. Great if you want your rocket to glide a long way, but not good for a typical chute application where minimum drift is desireable.
If you adjust the angle of attack of the kite to minimize the "lift" action (thus minimizing drift) you've just turned that pretty kite into a heavy, uniquely shaped and relatively inefficient parachute (because without "lift," a kite just isn't a kite.)
A couple of other things to consider: Parafoil kites need to have the angle of attack that is normal for kite flying (thus creating lift) in order to inflate and behave properly. Further, they would be significantly heavier and bulkier than a parachute of equivalent "drag" in a rocket application.
Considering a "boost glider" application, you can see where a kite might be practical because the net "lift" it generates is basically perpendicular to the wind direction (parallell to the ground if attached like a chute to a falling object.)
