There actually was a Photoshop Light: Photoshop LE. I got a free copy of Photoshop 5.5 LE along with a Wacom tablet. It really was a stripped down Photoshop. Imagine someone had sprinkled #ifdef PHOTOSHOP_LE everywhere and then said "Ship it!"
It was nearly the perfect product for me. The only really annoying limitation was working with a single step of undo/redo. I taught me to be very deliberate with my brush strokes. :D
This is a surprisingly common strategy for shrinkwrapped software. I interviewed at Chief Architect once. (http://www.chiefarchitect.com/). They have one codebase. They have about a dozen products overall though, which are all selective builds of the same codebase. Now instead of just selling $2000 software to professionals, they can sell $60-$600 software to hobbyists. Kind of funny thinking about how much money the humble #ifdef has made the software industry, eh?
Pixelmator has a UI that rivals Photoshop in many areas.
They're ok for totally free, but are a pain in the ass to use or missing some fairly obvious things (e.g. being able to set the radius of a rounded corner in Paint.Net).
And I say that as someone who rarely uses them, I can't imagine how annoying they are for proper designers.