I'm having trouble w/ the concept that a 3-yr-old can tell the difference between an ipad 1 and ipad 2. Do they look very different? Because I can't tell the diff between ipads 2-4 (5?). Don't know if I;ve seen a 1.
It's just as likely imo that she'll open the package and say 'grandpa, I have one of these already.'
I don't think this is the issue. There are both etiquette and parenting questions here, and from a parenting standpoint, many parents would be uncomfortable with a 3 year old getting a gift that nets between $300-$500 on my craigslist (depending on specs). I think it taps into larger concerns about entitlement, or as someone said upthread, how do you top this? Three year olds don't know value that well, but at 6 she'll remember what she got when she was 3.
And the etiquette is that, when parents have these concerns, it's not rude to express them. Ideally, DH would find a way to talk to his dad, because it's a boundary that may need to be set now, rather than fight a new battle every year. But if not, I see nothing wrong with OP thanking him for his generosity, but that she and DH are uncomfortable with their child getting a gift like this and they'd prefer that the child understand this is a family gift. And of course OP wants her FIL to understand this, as well.