>restricted "Prison OS" and >Free Libre system that respects user's freedoms.
These things don't really belong together. If the OS is "jailed" similar to iOS/Playstation/Xbox/Nintendo, where user doesn't have root control, then can it be Free Software? What if the prison doesn't give things like the source code?
By definition if it restricts root access and source code, then it can't be Free.
Now, if they were actually given FREE software, and restricted in the internet. This OS could be given to everyone on tablets, especially with things like the encyclopedia, and give prisoners an offline way to transfer media on to it. All good stuff, would improve literacy / knowledge / (probably even reduce prison rape, once some clever cookies find a way to score porn)
Would never happen where this is needed the most though, America has so many inmates but the focus is monetary and often the shitty mp3 and CD players they sell come loaded with DRM that are lining some company's pockets right now. It would be an uphill battle to give inmates actual rights, against lobbyist groups.
