Not a very appealing setup, period.
I am pretty sure that RMS gets his work done as well, whatever that work is. I wouldn't suspect him to be _lazy_.
It's too minimalist for any present day software development work
On the contrary! I spend most of my working day using vim in a terminal (with tmux) to do web development. It's just text generation, after all.
I'd go so far as to say that if you're doing test-driven web development, it should be possible to build a system entirely within a terminal, and that's what I aspire to. It's only the front-end styling (CSS etc.) that actually needs anything more than a terminal.
And yes, I find this efficient: far more efficient than hacking and pressing F5. I think there are other benefits to this way of working: it tends to make progressive enhancement and accessibility the path of least resistance.
I know plenty of climate science and financial programmers who spend 100% of their development time SSHed somewhere else, or who write reporting code using a minimal test case set of data that runs in 1s on their (slow, old) machine. For these people a slow, old machine is often totally acceptable - it doesn't take much horsepower to SSH (or even to run emacs and perl locally).
It's amazing what you can do with some swap and a little patience. ;)
I was using a 633MHz PIII until about 3 y ago, then using it again recently when my main computer died, and its gotten a lot harder (on Linux) over those 3 y.
I always thought that a "featureless" one (one without modern JS or CSS) would be extremely painful or useless, too.