Could be targeting library or desktop business uses cases?

There is no reason why it cant be squeezed down to $299. Basically the iPad ( $329 ) without screen. Or more like with A14 but $399.

Cool idea, the problem is I still dont understand where the target market are, the two above doesn't seems very Apple to me. There are ~700M business PC ( both laptop and desktop ), I would imagine this is attractive enough for Apple to make exception.

or, just make ipad a proper handheld general purposed device that can be used for more sophisticated purposes, instead of crippling it.

I’m terms of user experience Apple is unparalleled. If I was a teacher and there was a cheap option to educate kids with less hands on from me, I’d go with that option in a heart beat.