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It definitely is sandboxed. I think the concern is that kids will get off task with it by installing games and stuff.

IMHO, a limited (read: CLI) but general-purpose computing environment is exactly what we should be providing our kids.

No one would play TI-83 games if they had other options... but it'd be hard to say writing and modifying them wasn't educational.

Yes but that's a decision for the administrators, they may well not want portscans etc happening on their network.