just my take, but i'd rather have a higher quality used gun than a lower quality new one. that limit is just a bit low for any handgun i'd personally want new, but you might find the right deal used if you look long enough. if it was all i was willing to spend, i'd look long and hard for a trade-in glock, CZ, or S&W 59 series.
just to throw it out there, i also think that you can get more quality used for that price if you look at revolvers. probably not what you're friend's looking for, but i've seen lots of pre-lock smiths in good condition in the $350 range. a nice model 13, 19, 65, or 66 would be just fine by me.