The 300w power supply in that build is going to be a limiting factor, not only due to the low wattage, but also because it is probably of low quality and likely does not have a PCIe power connector.
For those reasons, I'd go for an HD7750, which is the most powerful card you can buy that does not need additional PCIe power connectors. It goes for between $90 and $110: http://www.newegg.com/Product/Produc...on%20HD%207750
Overall, the system you bought is good for the price. If you're doing both the GPU and PSU upgrade at the same time, you can bump the GPU up to an HD7770, but it will be over $100. Here's a good price on a Corsair power supply that would support the 7770: http://www.newegg.com/Product/Produc...82E16817139026