Scratch is fine until you hit that brick wall of 'how do I do X with this subset of a normal language/set of libraries', where X might be as simple as your kid saying 'I want to save the high score' or 'I want the player to have to guess a random letter' The solution to the high score problem, btw, is the cloud data block. Which is only enabled if you post a few hundred posts on the scratch forum. Try explaining that to an 8 year old.

I just bought an Iconia Tab A500 on Sunday from Target for $400, which came with a $100 Target gift card. This may still be available, and it meets your specs. The Iconia was apparently also on sale at Staples a couple of weeks ago for $300, but I missed it. So it's not too hard to get a decent ~$300 Android tablet if you look around.