Who invented etch-a-sketch?

It was created by Arthur Granjean. See http://www.answers.com/topic/arthur-granjean. Granjean originally called it "L'Ecran Magique" ("the magic screen").
It was licensed by H.W. Winzeler and released as Etch A Sketch in 1960.

Another answer:

André Cassagnes, an electrician at Lincrusta Company, conceived of the idea of a mechanical drawing toy using aluminum powder in a sealed case. (Lincrusta used aluminum powder as a raw material in its manufacturing process, so Cassagnes was familiar with its properties and could readily obtain it). He filed a patent application on the concept in 1957. He also submitted the concept to an inventors' competition in 1957, where it was well-received. This encouraged him to seek a manufacturer who could produce the toy. He was directed to Paul Chaze, the owner of a plastic injection molding company named MAI.

Chaze agreed to fund development of the device as well as helping Cassagnes to officially register his patent. Chaze instructed his accountant, Arthur Granjean, to prepare, file and pay for the patent on the "tracing device". The patent application was submitted 28 May 1959, without Cassagnes' knowledge and under Granjean's name. MAI produced some prototypes and then licensed the design to a French company, Joustra, which produced it under the name "Telecran" (the name that Cassagnes used for the toy) and paid Cassagnes a royalty. It was an immediate success in France, where it is still sold under that name.

Through a long series of connections, the toy came to the attention of H. W. Winzeler, president of Ohio Art Company. In 1960, Chaze traveled to Ohio to sell the North and South American rights to the invention to Ohio Art. In 1965, Chaze and Winzeler met with Cassagnes. Cassagnes agreed, reluctantly, to relinquish all rights to the invention, and all future royalties (except in France), for the sum of $10,000.

Over the course of the next 18 years, Ohio Art paid over $1 million in royalties to Chaze.