I know quite a few women who spent upwards of $400 on their prom dress - mine would have been if I didn't have an employee discount. However, it had considerably more fabric than that.
I would let my daughters wear something slightly revealing - like a slit up to mid-thigh, a deep v-neck - I mean, the prom is a time to feel special and beautiful and all that. However, I think they need a dress that permits them to wear both a bra and underwear.