Thanks for the amazing comments & pointers ! My $0.02 on some of the replies
1. Peripherals & true cost
A lot of people have pointed out the fact that the RPi is only 25$ just for the cpu.
Adding RAM, display, mouse, k/b will balloon up the costs.
a. To this, i would like to argue the notion of a platform.
once a platform becomes available, the community builds tons of awesome things (sw & hw peripherals) for the platform to make a kickass ecosystem.
e.g. when successful platforms (e.g. fb, iphone ,android,xbox,sony ps, kinect, twitter, etc) 1st came out, nobody could imagine, the massive #of community efforts (e.g. apps) that will pour in.
But as with all platforms, predicting success of a new platform is very hard & kind of a chicken & egg problem - Does the platform have to gain enough adoption for it to drive the ecosystem
OR
does enough of a ecosystem have to sprout to drive the platform's adoption ?
b. To build a PC out of RPi, at a min., you need a display, mouse & k/b.
I can imagine lets say if govt./org X decides to use RPi for a large scale project, they could build a non-profit coalition comprising display makers(samsung), k/b & mouse makers which would supply low-cost displays, k/bs & mice.
2. I completely *get* the notion that innovative & exciting techology in itself is not going to solve any of society's problems.
I find myself in complete agreement with ICTD pioneer Kentaro's viewpoints on this topic & his brilliant articulation " technology only amplifies human intent and capacity"
On education he says "Technology at best only amplifies the pedagogical capacity of educational systems; it can make good schools better, but it makes bad schools worse." [I] His TEDxTokyo talk on this issue is here [II]
3. The Indian Aakash tablet
I am curious to know if Kentaro/others are familiar with details of the Aakash project.
One thing that bugs me is that of all the educational devices projects worldwide, the OLPC is probably the most mature & has the "best" hardware.
I read on the Aakash wiki page [III], " After the device was unveiled, OLPC Chairman Nicholas Negroponte offered full access to OLPC technology at no cost to the Indian team."
I wonder if the Aakash could have much better design & specs, if they had truly collaborated with OLPC.
I. http://edutechdebate.org/ict-in-schools/there-are-no-technology-shortcuts-to-good-education/