Port View restaurant in Kota Kinabalu is good. Cheap as well. If you are game, try the open air eateries in the market.
Shangri-la Tanjung Aru Resort (STAR) is nice. Go to the Shangri-la site to look for deals. Also check HK based online sites for deals. I have always got breakfast for free. Buffet dinner isn't that expensive considering the spread. Abount RM80 (USD28) per person.
There is a local open air eatery about 15 minutes away ...there you can get cheap food - satay (local version of kebabs), grilled chicken wings.
There isn't a beach at STAR but the islands are just 20 minutes by boat away and you can get it from the hotel jetty. You can also arrange for scuba dives at the hotel jetty.
I had lots of fun at KK.