Actually, I think it does as now there is a decoupling of the Sugar UI which is, as you said, a kiosk, from the technologies that they developed.

The desktop paradigm is familiar and *VERY* well refined at this point thus, there's really no need to put the kids on a outside-the-box perspective on computing just because you can. Why reinvent a very good wheel? I think that Sugar was something very innovative but was it very useful in the end? Prolly not really.

NOW, when moving back up to the discussion of WHICH desktop you should be using? Well, that's just politics and money there. The point of the project was kinda to project the idea of informational freedom on the people of the world where in some places that's kinda a weird idea. Thus, when looking a little higher into the argument toward the ideology of the project:
    - information is free
    - you can go get information
    - go get information and improve your lives by knowing more about the world and its ways
    - oh, and do your homework on it too! (For those of you with teachers. The rest? We have minesweeper!)

You see the point of wanting to make the choice of a free operating system semi-important because that 'show source key' works anywhere in the current OS. Which means that the kids who want the knowledge about computers, which, is a very valuable skill and would improve conditions in many areas (theoretically, think infrastructure for communication kinda stuff) could learn that and start working on projects that would improve the places that they live... or something like that.

If you lock the kids into a closed source OS, they can't learn how the LOW LEVEL stuff works due to that key not being able to show you the source for, say, msvcrt.dll (the C++ interpreter interface thingy). Mind, they CAN eventually remove Windows and put UbSuDeRhCeSlinux on there to taste what that kinda freedom is like but, it's like how most of us (those that made that move before you found out how very nice OSX is) had to kinda 'discover' that there was more out there. It's just another step that you don't HAVE to make kids jump through as... (ta-dah the POINT) there is another perfectly useful desktop paradigm/implementation out there in Gnome/Kde/XWhatever!! Hence, you don't have to reinvent the wheel... but you don't have to make them buy a wheel with a EULA. (whew)