I'm sure your are going to get a lot great ideas, better than what I can think of right now (I'll come back if something better comes along), but I love it when my kids get books for that type of gift.
Another idea would be picture frames or photo albums. I see (nice) photo albums on sale for around $5 all the time. You could even ask parents who have volunteered if they have pictures of the class at various activities and use a photo printer to get some of the pictures from the year in there. Especially nice if your school doesn't do yearbooks.
Since you said beach towels, my son had a pool party not too long ago and his goody bags consisted of beach bags (on sale for $0.50, but normally for $1 at Garden Ridge) that I put in beach balls (Oriental Trading), a sports bottle with a freezer core (I got mine on sale for $0.75, but Wal-Mart has them for $1.67-$2.68, depending on the size). There was also a word search book from the dollar store, glow sticks that I picked up in packs at the dollar store--6 individual wrapped ones per package. I threw in sunglasses (Oriental Trading[always have great coupon codes you can search for online]). There was some other water/pool/beach toy too. I basically tried to make it seem like things they would need for a day at the beach/pool.