I was actually just at a talk given by the person who's developing Bootstrap (a programming curriculum currently run by Citizen Schools). He seemed to think the functional programming style provided a better background for algebra, since it hits on the concept of functions as both processes and objects (with properties of their own). (Of course, declarative programming languages can have first-class functions, too, but the focus is not on that nearly as much.)
Personally, I think that teaching functional programming first is worthwhile. The declarative approach is taught very early on in math class, so functional programming provides some new concepts that declarative programming does not. I agree with many of the above posters that the bit about it being "too hard" is a myth, it's been done.
