This proposal has a lot in common with the $100 laptop project: Simple-to-use, robust, cheap hardware that is not cutting-edge but serves basic user needs. The main differences is that the neo-micro doesn't have a built-in screen and battery and that no crank handle for power.
But, like the $100 laptop, it requires true mass-production to work: You should measure production runs in tens of thousands or even hundreds of thousands to bring the cost down enough to make it worthwhile. So you need a wealthy backer and probably tie it to some government or international initiative to get it "pushed" sufficiently.
A few minor suggestions to the proposed design:
- No need for memory card slots if you have USB: You can use USB flash keys for external storage.
- Rather than having a lap-top style joystick in the middle of the keyboard, have it under the space bar for thumbs use. And make it a bit bigger, so old rheumatized hands can use it. Make space below the space bar to rest the hands (for real "laptop" use).
- Make text-processing HTML based. HTML has more than enough features for non-advanced documents, and it allows you to design simple web content. And it allows export of documents to almost any other platform (Windows, Linux, etc.).