Our three daughters have an ipad 1 each, two of them have a 16gb black model and the other has a 64gb black 1st generation.
They all use netflix, games, music, reading material on them and using them with Apple TV and they manage very well.
Myself I have a 3 rd gen 64gb and every now and then our eldest will use it and realize that there are some apps she enjoys playing that are not available to the first gen model, but on the whole they're happy to have them and still be able to use their own devices within the limitations and restrictions we heavily impose upon them . All three iPads for the kids are maxed out on restrictions with password enabled security , no app downloads, deletion, no web browsing , no material over 12yrs .
Our kids love the iPads , they feel a part of technology which they use in school as well as at home . They're too young to have iPhones so the ipad fills the void perfectly.
I personally would even buy a 64gb 1st gen and use it for music or media player on the wall wireless to a dock , they're still cracking devices and not to be knocked, considering their age, and how quickly technology has progressed through the models I have to admit they're still doing alright and holding their own , you get what you pay for really. Besides its possible to buy a 1st gen 64gb + cellular for less than £150 , a bargain at that and probably less than most iPods of the same memory.
We've never been disappointed with our iPads, each and everyone of them are used frequently and differently by our whole family .
Sent from my iPad 3 64gb using iPF