In other words: It doesn't help at all against malware on the computer.
> The (state-provided) USB reader should have a small lcd screen to sum up the thing being signed "Vote for Ms.Ryjavik on election #123" "Vote for Yes on vote #432" and a confirmation button.
In other words: If the USB firmware is infected, it's still not secure.
> With these modifications, and the ability to check a cast vote has been received, you can have secure elections on insecure devices.
So, if you are using secure devices ... then you can have secure elections on insecure devices? In this scenario you aren't actually using the insecure device, other than for establishing a connection to the internet.
Or rather, as you described it, it also functions as the input device--but that is a security problem because it can be used to violate the secrecy of the vote, so it's not actually secure that way either. The only way to make it secure (sort-of) is to not use the insecure device.
> However it requires trust in the officials to do their jobs correctly and to not tamper the tally.
And that is the reason why electronic voting is not an option. Elections have to be able to remove a government from power against its will. An election process that depends on the integrity and honesty of the government that you want to remove from power is inherently broken. An election process that only works when there is no conflict is not a useful election process.