With regard to Islabikes, they're not as expensive to own as you might think.
I've bought my daughter two - both of which she's outgrown - and her latest one is a Halfords Apollo (Elysium, maybe (ETA Elusion).
What I would say is that Islabikes are unbeatable in terms of weight and usability. And while the buy-in price IS high, so are the returns you get on them. And that's what you have to look at to see how much a bike actually 'costs' you.
The first one was a CNOC 16 which retailed (at the time) at £229. When we came to sell it, I'd heard that Islabikes resold well and priced it at something like £150. In hindsight, it was way too low.
The first person to ring bought it for full asking price, but I had people calling me up for days afterwards offering up to £180 unseen (on the strength of the pictures on the ad).
Total cost to own the bike, £79 - but it could have been as low as £49.
The second was a Beinn 20, which retailed at £329. Knowing that it was likely to sell well, I offered that one for £250 and took £240 for it. The woman that came to pick it up had bought another SH Islabike that day, as she had twins, and paid more for the other one, which was in a much, much worse state. So, again, I probably could have got more for it.
Total cost to own the bike - £89, could have been less.
I mention these facts and figures, because her very first bike was Christmas present of a Dora the Explorer Halfords thing with stabilisers. From memory, this was £69 from Halfords and that sold for a fiver. Mind you, it was a dangerous pile of poo. I'm not very mechanically minded, but I know how to set up brakes, and there was nothing I could do to get them working properly.
Total cost to own the bike - £65. Only £14 less than her first Islabike, which was streets ahead in terms of build quality.
I have no doubt that when we come to sell her current Apollo, that I will see very little of the £119 we paid for it (and that was half-price). I'd expect to list for about £30 and maybe get £20.
Total cost to own that bike around £100.
What I would say, however, is that the reason we didn't go for an Islabike this time around, is that they do look a little dull in comparison to offerings from other manufacturers (maybe more so for boys). This time I let my daughter choose her own bike and she was made up with that whole process. Partly, I think (in fact I know) because we ended up with a 14" woman's frame and 26" wheels, rather than another 'kids'' bike.
Nothing will compare to getting a cheap, cheap SH bike in terms of cost of ownership, but cheap new bikes are not always as cheap as you think. Plus what she's ended up with is probably heavier than mine, will cost more to own than an Islabike long term and she finds it hard to use the brakes as they're too big for her hands.
The final thing I'd say is that it has to be something they'd be happy to be seen on (for older kids), and something they'd enjoy riding (for younger kids). After all, they get bought to be used, and that's the main thing.