I had a kit like this when i was a kid, but it was much less forgiving, was much more difficult to tear down, and required much more manual dexterity.
Today I want to recommend a kit I got for my 10yr old niece that manages to capture the same spirit, but is much more forgiving and easy to use.
The kit is part of a series called "Snap Circuit": http://www.snapcircuits.net/
The one I got my niece was focused on alternative energy
Their top-of-the-line general purpose kit
is like $90, but they have starter kits
for as low as $25.
I highly recommend these for young kids who you want to introduce to the fun of making stuff.
There are more advanced kinds of electronics construction kits for older kids who might want more of a challenge, like this one, which uses wires: http://www.amazon.co...Center/dp/B0035XSZDI
But the Snap Circuits I am posting about have the advantage of being very resistant to breakage and much easier to connect according to instructions, so they are better for younger hands.