FWIW, we got back a few weeks ago and have three sons: 7, 5, 2. We gave each of them (as their Christmas gift from mom and dad) $100 to spend in WDW. We didn't buy anything for them in addition to this, except a few shirts. Before we left, I had bought autograph books, lanyards, and a few pins each to start trading (on Ebay), so they had that ahead of time.
I agree that a 3 yo can't understand the value of money very well, but he could understand that he has his own and when it's gone, it's gone. It will actually work in his favor that at his age, he will probably prefer the less sophisticated (cheaper) stuff. My sons all came home with some $. Here's what they bought that I can remember:
DS7:
a Mickey watch ($30)
Star Tours toys (about $30)
spider monkey plush at AK ($15)
one more pin ($7)
DS5:
chip and dale plushes ($20)
Star Tours toys (about $30)
mickey ear hat ($12)
more plushes (about $25)
DS2:
3 monkey plushes (he was wild about those!) ($35)
Pooh hat ($20)
Cars "matchbox" style cars ($15)
a few other little things (about $10)
They didn't get too much (for a first trip that lasted 10 days), but you can see they needed almost $100 each. I think it would have frustrated them to not have enough for a few good items. I did strike pre-emptively (sp?) when I could with the pins and lanyards, as well as lots of glow sticks and toys I bought ahead of time at the $ store. So they were not tempted by that stuff, which can add up.
We didn't limit how much they could spend per day, but warned them of their running tally throughout the stay. We didn't have any "gimme" moments. Sorry to get longwinded...I thought about how to do this carefully before we left, and agonized over it, so I hope this helps someone else!
