This is a fantastic idea.
I've been mentally designing this idea for literally a decade now, just about exactly. I actually think it can be made quite better than that, at a lower cost. And I think similar to the Raspberry Pi Foundation, public sales could fund philanthropy in a very critical and under-served area. Give it away free as much as possible, otherwise get it into commissaries as cheaply as possible (and lock them down with sales agreements to prevent them from overpricing).
I was really into classic computers as a kid, and one that always fascinated me was the TRS-80 Model 100. It's your basic dumb Z80 computer: it has a 8x40 character display, a keyboard, and... that's it. What made it distinctive is the >20-hour battery life on 4xAA batteries, which is just absurd and still has yet to be matched today. It's minimal and good at what it does - edit text. It edits text. For a really long time, on easy-to-replace batteries.
Well, surely we can do better today? I want the minimum possible programming terminal that's productive, that you can squeeze the maximum amount of battery life from. Yes, from AAs if necessary.
My ideal implementation would be AVR8, AVR32 if necessary. Not only are they dirt cheap but we can clock them down to zilch with PicoPower, to get that battery life. PicoPower is 0.2 mA per MHz at 1.8V, and the <1 uA sleep is literally less than batteries will self-discharge in the box. It runs some thin native-C implementation of a text-editing terminal, and a Wifi connection is used to flush a minimal data stream back to a local server. When you do things like compile or run, or debug, that runs on the host, but you have a thin terminal that continues pulling almost nothing.
Even OLED power draw is nontrivial and it's hard to get OLEDs that are both inexpensive and large enough to be a viable display, so here's the next clever bit. E-ink display. You only use power when you're redrawing it, and you can probably redraw it leisurely at your own pace with a slow MCU. In theory you can reduce refresh speeds even further by only redrawing a section - the downside is you leave a "flipped line" outside the region. Which just looks like notebook lines anyway.
Throw on a good 40% keyboard kit (is there anything that can be bolted down to another board? honest question) and you now have something that's basically a wireless VT100 but can do all your shit, as long as you are comfortable working in a text mode with a limited refresh. This is a workable protocol model - it's already been done! Hell, we have more power than VT100 right in the terminal.
To make it even cheaper you could pick some super common laptop model and use that keyboard socket for your motherboard. Let's say, the old Thinkpad T420 keyboard, which is already knocked off in China like crazy and is good enough to keep alive. Just plug their parts into the board. How much do they cost in quantity 100k? Probably nothing.
I've run this concept past HN a few times before as a programmer terminal and usually gotten a positive response for their own usage (would be good for a dumb serial terminal too) but this could be a philanthropic usage good enough to drive the concept.
The prisoner typewriter is the exact same thing, minus the wifi chip (USB dump only), plus a warden's interface web program to oversee text, plus a clear plastic shell. So just a dumb TRS-80 Model 100 again. And the battery life is an incredible advantage when you have no regular access to a USB port to charge, and you're getting raked over the coals by the commissary. How about 10 hours on a pair of AA batteries, with a reserve AA for SRAM retention, and perhaps a coin battery epoxied on-board as a last resort? I think that should be doable.
I'm actually serious about this, anybody else down? Prisoner's lives are shit, but at least we could keep them from being raked over the coals for literal typewriter supplies in TYOOL 2017.
The big problem would be dealing with the established player in the field who would undoubtedly come down like a ton of bricks. Good luck getting approved in the commissary when you are fighting a state-by-state battle with legislatures against these guys.