I don't know guys I would not offers them anything, it should have come with the car when you paid for it, it is part of the car, that tag is not doing them any good, nor is going to do them any good in the future, specially if the original owner is no longer alive; But thats my opinion, and you know about opinions everyone has one!!
And I'm not going to disagree with your statement. The tag is part of the car. Personally, if I was the second owner of the car and the original owner refused to part with the tag, I would have refused to part with my cash. That attitude doesn't do the OP any good, though, as he bought the car with the tag already missing.
In this case, possession is 9/10th of the law. They possess the tag and can do anything they want with it, including destroy it, which does no one any good. A small cash offer in good faith isn't inappropriate, in my opinion. He could go in with guns a-blazing and explain to them that without the car, the tag is simply worthless to them. It is. But then, out of spite, they
could destroy it, meaning it's now worthless to everyone involved.