No, I do not think your punishment was unreasonable. And, as a former 2nd grade teacher (28 years of it), I can tell you that 8 year olds DO have a concept of money. And, 8 year olds DO know right from wrong. It appears he did this deliberately so he should have to give something up. Not only would I have him make monetary restitution, I would also take away one of his favoritey Xmas gifts until such time as he has paid for his brother's gift.