One of the recommendations for computer safety for kids used to be to force them to use a computer in a place that's visible to the family, like the family room. It helps prevent them from venturing into websites that are inappropriate for their age or even dangerous. I know that's less likely to happen today with the prevalence of internet connected phones, laptops,, etc., for teens, but it still seems like a valid approach for younger children.
For an 8 year old to have an Ipad with internet access that he would use in his room alone seems to be making it too easy for him to end up places on the Internet where you wouldn't want him. If the issue is that his sister is driving him to escape to his room, maybe the parents need to involve the sister in other activities, so some of his gaming can take place where he's around the family, rather than isolated.
I also agree that a $600 electronic device is not appropriate for an 8 year old. It's just too fragile to expect someone of that age to care for properly. I bought one for my 20+ as a gift, but would never have given her this type of electronics when she was his age. She did have the handheld Nintendo when she was slightly older than he is, but again, used it for the most part when around the family. And with that, I didn't have to worry about what she was accessing.
I could see having a family IPad that he could have access to sometimes, in the right setting and for limited time. It's a great device to play with and it would allow him the fun and experience of learning how to use it. But it's different to access one occasionally, with permission, than to have it be his.