I suppose that the risk is that those using this school system will assume that the crippled KDE installation represents Linux. When they then use their mate's knocked-off copy of WinXP, and find out how much more it can do, they might be very impressed.
In other words, Linux=KDE-- therefore Linux = school headmaster's restriction. Windows=Computing++ therefore Windows is what we want out of school!
Maybe, the answer is to give them all a CD with KUbuntu to take away and put int any computer they find AND give them the root password. That might get them properly interested in Linux, but then heaven (or, much more preferably, a non-mythological think) help the rest of us since who knows what they might do!