Our not-quite 3 year old has pretty much commandeered my Nikon AW100 waterproof camera. She runs round the garden with it, chucks it in the paddling pool, uses it in the bath, drops it on the patio – it’s fine though. I’d rather that, than it sits in a cupboard not getting used.
You can pick them up second hand on ebay for not too bad a price. But, any waterproof camera at a given price point is quite a compromise compared to a normal compact in the same price range because you pay a lot for the ‘tough’ bits and the waterproofing. They also generally have small lenses with poor aperture ranges, so aren’t great in low light.
I’ve got a Nikon P200, which is older than the AW100, but wipes the floor with it in outright picture quality & speed of use.
If you can get away with ditching the waterproof element of your requirements you’d get a lot better camera for your money. One of my nephews had a normal compact from about the age of 8 and really looked after it – but had it been given to one of my other nephews it would have been smashed into bits or dunked in a glass of squash within days. So, I suppose it just depends on your boy as to how well he looks after things and whether you need a ‘tough’ camera or not.
Fuji used to do some reasonably priced waterproof cameras, which were pretty good – my mate used to work for Fujifilm so always got hold of demo models. – You can get the XP130 from John Lewis new for £130.