Unfortunately, after I submitted this ticket, I discovered that the
patch alone is not sufficient.  It turns out that the group ownership of
/dev/pts is also not being set correctly (it is still root:root), which
also prevents users that are members of the tty group from being able to
create ptys.

I tested this issue by doing the following (or the moral equivalent):

  mkdir $ROOTFS/dev/pts
  chgrp tty $ROOTFS/dev/pts

while the instance was down.  When I brought it up using lxc-start,
/dev/pts was again root:root.  I'm not clear where the ownership is
being changed.

I changed the group ownership from within the instance and installed
screen.  I created a non-root user that was member of both tty and
screen and changed the permissions of /var/run/screen to 01777 and was
able to start screen.  So far so good or at least less bad.

I'm still investigating my original problem (which was using the Perl
CPAN module IO::Tty), which is getting yet another error message:

  IO::Tty::pty_allocate(nonfatal): grantpt()...

which appears to be a related problem.  I'll post more tomorrow if I
figure out anything else out.

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https://bugs.launchpad.net/bugs/1242913

Title:
  /dev/pts being created with mode=600 by Lxc

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