I very much agree that an arduino + sensors is a very good investment for... the right kid.
I don't agree with the educational impacts given though.
Without some... technical talent or real interest, Arduino would for example unfortunately
be the first one to disappear of my list.
Educational impact of eating a pizza ? When following a study as cook perhaps 
?
With 160+ beats per minute and 100 dB listening to music will indeed have the effects you mention,
but listening to music by itself can have lots of positive effects as well. For a lot of kids
it gives them something that binds them which is a quite important piece of social education.
Describing it as almost certainly negative is a quite harsh in my opinion.
Would you have bought a $10 Ebay Mp3-player and added a second hand musical instrument,
I'd have a very hard time choosing, even when my kid would have technical talents. My parents
must have suffered enormously, but man... am I grateful for all the music lessons I got.
I may not earn money with it, but playing a 2 hour session often feels like a vacation of 3 weeks.
The video games... which quite often are multi-player RPGs nowadays,
may seem worthless to many, but it has more or less the same effect as the MP3-player.
Although you may never have met a fellowplayer in real time, when he's in your team
and you shoot him, the others in the team will certainly tell/teach you such behaviour is
inacceptable. Working hard together to reach a goal, although it may be "killing the enemy",
also teaches something important. Hearing "It's a pity we lost this time, but at least we all
did our best" could.... be possible when you buy something "very negative".
Books, I'd change that one from several months to... a lifetime, indeed depending on content.
Every kid should have access to a good library and get loads of books.
The arduino...
It would totally depend on the kid. If they're technically interested, spend the $50 and
keep saving for all those 50s in the future. Buy that ARM-board as soon as you think your kid's ready.
Having blown up 3 microcontrollers while still having lots of problems with the fade-example,
will not contribute to self esteem though. In the same way I can hardly kick a ball while soccer is nr. 1 Game in Europe. I'm glad I had a dad who really loved soccer, but realised I... was much better in Judo.
My story with kids...
Unfortunately my wife and I have no kids, but I have been in a quite unique position for
8 wonderful years. As Janitor on a school for kids aged 4-12, I was no parent who told 'm
what to do nor... the teacher they had to listen to.
We had fun day in day out and it was quite easy to walk among them on the same level.
Although you won't see me playing a RPG soon nor appreciate some eh... music,
I had a hard time not being interested in the kids behind the things they were interested in.
Since the kids knew... I was always in for joke and they didn't need to listen to me I've
heard almost anything and was able to give loads of free advice.
Ofcourse I've seen "fights" over an RPG-game every now and then. Some of the kids were
also quite hard to motivate. But on the school yard I've also seen opposing teams
complimenting each other for "the most bloodiest kill ever" and hope I had some influence.
I'm sorry to say so, but it's too simplistic in my honest opinion.