Bicycle disc brake pricing is an odd game, advice can be a bit overwhelming & quick look can leave you horrified at both the expense & diversity... but if down to sheer practicality & cost conservation, it pays to very carefully do a bit of searching around.
For example you're absolutely correct in that should you wish greater stopping power on a budget, a larger then stock rotor is a less costly & often more effective upgrade then a switch from say, an Avid BB5 to an Avid BB7 or even mechanical to hydraulic calipers... where it gets odd is that can be less costly to buy a caliper & rotor set and then upgrade the rotors then it is to just buy a set that comes with the larger rotor in the first place. Sometimes it's even cheaper to buy a set of front and rear calipers & rotors then it is to just get the one. Heck, I've seen replacement pads for my Avids going for the same as I purchased the entire caliper & rotor set for and it came w/pads ofc lol
Whatever route you chose to go, generally I believe discs are definitely the best choice & they don't need be expensive, even with oversized rotors. I've included some links below, I've used Avid as an example as a combination of economy & quality, the easy availability of both replacement parts & upgrades - naturally there's many brands & types to choose from, these are simply examples I know are good, entry level yet effective brake sets. These are both 6 bolt setups as they're pretty much the most common & least costly... if you've a 6 bolt hub that is;
AVID BB5 MTB Mechanical Disc Brake Front and Rear 160mm
http://www.amazon.com/AVID-Mechanical-Brake-Front-160mm/dp/B00BOJ60O6 $48
AVID BB7 MTB Mechanical Disc Brake Front and Rear 160mm
http://www.amazon.com/AVID-Mechanical-Brake-Front-160mm/dp/B00BOK39T4 $65
The difference between the BB5 & the BB7 is primarily pad size, the BB7 caliper itself is marginally larger so it may not fit on all wheels. I've had both, the difference in stopping power between them isn't remarkable so if you have to have the BB5s you'll be fine with just the larger rotors you wanted. Again not the only or best example, but here's an economical 203mm rotor - remembering ofc that if you're upgrading rotors instead of buying an entire caliper/rotor set, you may need the mount adapter. Some come with one but even if they don't a bit of hunting around will usually turn them up for roughly $10 or so;
RavX Disc Rotor 203mm
http://www.amazon.com/RavX-Disc-Rotor-Size-203mm/dp/B0060Z5630 $20
Everyone has their favorites & to each their own I figure, but one thing is certain - be wary of "off brand" generic calipers... it's not necessarily that they're all unsafe or ineffective (some are, some aren't), it's that & you may not be able to get replacement pads, making any initial cost savings a moot point lol
