A Tiny Digital Camera Stripped Down to the Bare Essentials (2017)
petapixel.com
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(Just poking fun. I like the look and the concept.)
* For very little kids, the best camera is the Nikon S30 series (last I looked, they were up to the S33). It's cheap, waterproof, and tough. Kids can take it places, and you don't need to worry (and they don't need to worry either).
* For older kids, crazy as it sounds, the best camera is something that does full manual well. Kids can learn aperture, shutter speed, focus, zoom, and ISO. An older DSLR can be had for around $100-$200.
* One step up for there -- once kids care about photo quality -- is a compact mirrorless. I'm a big fan of the Olympus OM-D series (and older, used models are fine), but it doesn't matter too much. Sony is the big fish in the pond here, and you can't go wrong. Mirrorless is nice since it mounts easily to microscopes, telescopes, and other scopes.
If that's too big, the Sony RX100 series is surprisingly excellent. Pick your price too, since you can buy a I or a VII, with successively higher prices.
* Connected to a computer, a USB CS-mount camera is nice for learning computer vision programming. ELP makes decent ones. You can pick high frame rate, or high resolution, or USB3, or buy one of each. M-mount is fine too, and a bit cheaper.
PiCAM is fine too, as you were considering, but it will be a lot more work to do a project. Better for older kids.
This camera automates/gives what shouldn't be automated (filters), doesn't give controls over what's meaningful (ISO, white balance, shutter speed, aperture), won't give great photo quality, and doesn't look overly sturdy.
I learned on an old Olympus DSLR that had poor metering and slow AF and thus trained me to judge exposure and focus by eye. The poor dynamic range also forced me to sometimes shoot (manual) HDR and properly develop the RAW images to get the detail out of the highlights and shadows. A lower resolution sensor meant that I had to get the framing correct as opposed to cropping later in post.
However a kid might also find the DSLR difficult to use without the gratification of instant results (the cheap point-and-shoots have suprisingly good auto modes). They also might find the size and weight annoying to bring along - and choose to leave the camera at home. Honestly even as someone who likes photography there are many times when I choose not to bring the DSLR for that reason.
I think it really depends on whether they want a camera to take snapshots, or want to get into the finer technical and artistic aspects of photography.
A dSLR isn't a great bring-along device; that's a cell phone. They're surprisingly competitive at this point. An RX100-style camera will also outperform even a modern dSLR with kit lens as well, in auto. The dSLR will only inch ahead once you buy lenses (or other accessories like lighting).
A dSLR is for when you want to pursue photography as a hobby. If you're going out for a walk in the park? Cell phone. If you're going out in a walk to find and shoot photos of animals? dSLR. Taking photos of the kids? Cell phone. Setting up lights for butterfly lighting and posing kids? dSLR.
It's like skis -- you don't take them along unless you're going skiing, and if you compare them shoes, they'll seem awfully impractical as a transportation device.
I'll mention: For focus, you can buy classic split prism focus screens and retrofit them into most dSLRs. At least a few years ago, they were like 20 bucks. That's a really nice weekend parent-child activity.
I will state the obvious, but it's a helpful obvious:
1) Any spec of dust will be super-visible. Trying to clean dust off once you're done is painful; you'll usually just make more of a mess each time. It's a lot easier to do it right the first time.
Go really overboard here. Wash your hands AND use gloves of some type without lint AND use tweazers. Make sure the environment is impeccably clean. Vacuum, dust, etc. the room. Wash the table. If you've got a HEPA air filter (and with COVID + pollution, it's not a bad idea), move it into the room. Go wild.
2) Use a dSLR you don't care about. If you're who you sound like you are (an old-time photography nerd), you probably have a 15-year-old one you never use which sells for $100 on eBay. Use that one.
I did this with my favorite dSLR, which was from 15 years ago. It's obsolete, but the controls fit me like a glove. When I finished, the metering was messed up -- it consistently over- or under-exposes in auto. I don't know if I broke something, or perhaps if it just failed at some point before I started (it'd been sitting in a drawer for maybe a decade now; I didn't test it much beforehand).
I didn't break anything (else?), but it would have been really easy to do so. These are fine, precision, delicate parts. Don't use a $2000 modern model.
I use it as a full manual camera now, and it's a heck of a lot of fun.
I'm not a photography person, but I also don't think it would be a good first camera for kids. I would think of it as a more reusable version of those disposable film cameras - something to play around and snap quick photos with. In particular, there is no screen to instantly review your photos with, so it's delayed feedback (no way to see your last photo sucked and to try again) and delayed gratification as well. That might be a desired feature for adults, but I'm not sure if kids would appreciate it.
Olympus, Nikon, and a couple of other companies have made numerous models of dust/water/drop proof cameras and even a ten year old digital camera is going to have pretty decent picture quality.