The prices of used DSLR bodies have all dropped a good bit recently. The D300 has gone from $800 to $500-550 over the past year. The D700 is now around $1500. The D200 is no different. It's actually pretty remarkable that you can still get $250-300 for one when you consider that the last ones sold new for $599 shortly after the release of the D300. It's not unique to digital - film cameras are worth very little now. And I have three old laptops lying around that still work but are functionally obsolete.
I agree that it sounds like a huge drop in value to only get $300 for a camera originally sold for so much more. I'm in the camp that believes having an extra camera is important. It's like insurance - when you need it you really need it. My camera and lens failures almost always occur when I am traveling and not having a backup body or lens means photography is done for the remainder of the trip.
But it's going to continue to drop in value. If a family member does not want or need it, I think selling the camera is a pretty good option. If you need a backup, you can often rent one for a future trip or in many locations simply buy one as needed. In almost any major city, you could immediately buy a D5100 or V2 if you need a backup camera.
I use KEH.com as a reference for the price on used gear. They get a little premium, so as an individual it would be tough to sell your gear for more than 80% of what KEH is asking. Right now they have a model rated EX for $302. That suggests market value to sell your camera is around $250.