I've had my fair share of laughs from this whole turn of events, but giving this some serious thought (after cutting through all the Indian government's political BS), I surmise this will grow into some sort of distribution platform for schools across rural India.
Imagine a low-cost, alway-on media server for educational materials that is more current than several-year-old textbooks, and is available to students at virtually no cost (hopefully the government will subsidize the hardware).
I would imagine schools might be able to buy a notebook shell type accessory, which has just a display and keyboard. The accessory plugs into this unit (or perhaps connects wirelessly) and can then access all materials available to the educational institution.
It cuts the cost of storage and some motherboard electronics from the individual laptops that students can own, making the system viable and inexpensive.