I am really glad to see that he did not jump to "profit" at the end. Hope he gets enough support.
Let me give you an example. In India, many low income people can't afford shampoo bottles. So retail companies came up with a concept of 'shampoo sachet' [http://goo.gl/GUopS] (similar to ketch up sachet) and sold it for a rupee (back in 90s when I was growing up). Without this product, I would have never used a shampoo when I was a kid. It was a HUGE seller and you could find it in remote parts of India. I think it is taught as an example in business schools in India.
As per my other post, he is selling his napkin for 12 rupees for 8 napkins. If he actually decided to manufacture them and retail them on a scale, I am sure he can still keep the same low price and achieve better distribution. His current approach of getting people to install machine and then making napkins is much harder to scale. That's my personal opinion anyway.
Then to your other points. The shampoo sachets did bring shampoo to the common man not the poor. Businesses had to innovate because back then even the middle class could not afford shampoo. Also I hear many people used (http://en.wikipedia.org/wiki/Sapindus) before the shampoo with perfectly good results and so compelling them to move away from it required a really good motivation and a really low price was it.
Profit isn't intrinsically evil. Sometimes not profiting is much more evil.
Now only 25-50% of rural women are using these sanitary napkins, but the makers are maximizing their profits. How long before another person comes along and designs a similar machine that can narrow the profit margin?
Theoretical capitalism is quite efficient in theory, but in practice there are a lot of difficulties realizing it. In this case, it is admirable that people are willing to forgo maximal profit in an effort to instead look after the health of as many women as possible.