You're not likely to build a web server nor other general application within these constraints, but purpose-targeted applications with capabilities somewhat past an etch-a-sketch UI do seem feasible.
Think Pokemon. Not "general purpose".
And the vendor can sell "widget packs" for these target applications.
I believe that real hacking is linguistic, and that's just not isomorphic to anything in two dimensions.
There are many specialized tasks which sort of work, like dataflow programming or music sequencing.
http://en.wikipedia.org/wiki/Max_%28software%29