USA Today quotes some experts to that effect:
“You could buy a lot of crayons for $60," says Susan Linn, director of the children’s advocacy group Campaign for a Commercial-Free Childhood and author of The Case For Make-Believe: Saving Play in a Commercialized World. "This is the marketing world’s push to drive children to digital screens and away from creative play."
Instead of playing with digital cameras, kids 3 to 5 should be playing with sticks, stones and mud, says Joan Almon, chairman of The Alliance for Childhood, a children’s advocacy group. "The camera becomes the lens though which they see the world. It’s one more thing that gets between a child and a direct engagement with life."
Not so, counter camera makers:
"This generation of kids is born with technology all around them," says Chris Heatherly, vice president of technology at Disney Consumer Electronics. "It’s not something they grow into, it’s something they grow up with."
To quote former Secretary of State James Baker, I don’t have a dog in this fight. I definitely lean toward the stones and mud approach myself (both being free and plentiful in my yard), but I’m hard-pressed to see any great cognitive harm in giving a young kid a toy digicam to play with once and while. My guess: They’d take it out into the mud and hit it with a stick.