Why do some people have the notion that it's bad to give kids nice things? There's a difference between having nice things and being spoiled. If you're worried about kids appreciating what they have, the last thing you want to do is give them something crappy. Instead, you should make your kids work hard to earn what they want, which I think would make them value it more.
Also, most technology could be called "highly distractive", including this forum.