Re: puchasing a tenor sax
Yes, you definately want to stay away from Costco for saxophones.
Get an idea from the saxes listed on this site, both vintage saxes and modern saxes. Vintage horns can be great for Jazz, Conn is my favorite (before 1970), but others are good, too. After you've done some more research, you'll have a better idea what you want.
Your son's enthusiasm sounds great, and he's right, theory will make him a better jazz player. You might want to post on the jazz board for more info (if you haven't already). They'll be better at things specific for jazz than I am.