I did get a kick out of Pete telling the lovely "Miss Circle" that she could win some money to help pay the costs at Columbia. I thought to myself, "Yeah, $2,500 would really do it." ;-)
However, I think the payout's fine for a cable game show, history notwithstanding. If it were being done for syndication, I'd cry foul, and even though GSN's even given away more in recent years, I find no major issues with the payout. I'd much rather have the $2,500 than the trips that so many other cable games offer.
One other question, does the runner up keep his or her money as consolation? I imagine you win a round and the money's yours to keep regardless.