With art I feel like buying the right materials can make a lot of the difference. It isn't necessary for kids to have the most expensive and best, but some products are better than others and it is very apparent with watercolors.
I hate seeing watercolors that my children bring home for me from school. More times that not they are done on regular thin computer papers, sometimes they are done on cardstock, but never are they done on watercolor paper. It is more expencive, but I think worth the price.
I don't buy the heavy watercolor paper I used to work on when I was younger (it can be very pricey for one sheet.) I usually go to a craft store like Michaels or JoAnn's and buy a pad of watercolor paper. This last time I bought a cold press 140 lb paper. My kids know that it is special paper and they don't really "waste" it like they do plain white paper. But because it is special they work harder when they paint and tend to take it more seriously. Which is one of the reasons I think using real watercolor paper is better than just paper paper.
The other night my daughter Ally wanted to do some water coloring. We have always done it flat on a table, but she had other ideas. She asked to use the easel. She was really excited to do it that way. She even said at one point, "look I am a real artist." That statement right there is what I want for my kids. I want to provide them with good art supplies to treat them like the are real artists they are.