There can be different cohorts of students. If a student is at the point where they can start exploring iOS development they can perhaps have a swing at it with this machine. In reality, they'll have been using this machine, know enough about the limitations, and be thinking of upgrading.

Kids already are well aware of iPhone upgrades. Parents will get them this machine. They'll get going and soon enough be badgering their parents for an upgrade to a more competent machine. That is all by design while being an affordance for people who can only get in at the cheap end.