It's entirely possible that a $25 smartphone will still be junk [2] until well after some other platform is created, polished and delivered to those users.
[1] Touch-based phones and tablets
[2] that is, flawed-enough that feature-phones and used phones are preferable to the experience provided by a 'new' $25 smartphone.
A relatively low risk strategy might be see what's out there in volume, tweak, adopt and apply downward price pressure. Those phones have the advantage of already being in production with many units worth of experience. Starting at $70 with the aim of getting to $25 may not be a long way of getting there.
I don't really know anything about the business. Just thinking out loud.
[1] http://www.engadget.com/2013/12/13/google-removes-apps-ops-p...
In the end, what killed the OLPC was politics, not product execution. And the initiative was widely sucessfull, just in a way that was different from the stated roadmap.
Mozila is in a similar situation here. If somebody else make a device that replace their phones, they'll probably see it as sucess.
I wonder if Firefox might find it easier to just pick up existing low end android models and see if they can get a better experience with Firefox OS.