I had a similar experience learning the piano when I was a kid. Understandably, my parents started me out with a cheap $100 electric keyboard, which was good enough for the first year or so of practice. As I improved, though, it became a big hindrance to my progress, as 1) the keys were unweighted, 2) the speakers couldn't accurately produce high/low notes, and 3) the keys were slightly smaller than the standard size. Practicing at home was too different from the real piano I used a lessons, so I started to feel really discouraged.

I was too young to understand quite what the problem was, or to save up enough money on my own to upgrade, so I ended up quitting lessons altogether.