I own at least a dozen perfectly effective handguns that I got for $200 or less.
If you are patient and persistent you can get some very good deals on GunBroker.
Just a few weeks back I won the bid for a Ruger Single Six for $135. It had some rust, but that was nothing that some steel wool and a $10 bottle of cold blue couldn't fix. It functions perfectly.
Last year I got a Smith and Wesson pre model 10 for $140-something. The finish is worn, but it locks up tight and shoots well.
People who claim that you can't get a decent handgun for $200 or less are incorrect.