OLPC has a solution to that, IIRC each unit needs to be regularly in contact with a base station at the school or it disables itself. Or you could just have remote disabling on-demand like BlackBerry.
I'm tempted to mention "that is hardware DRM". Why am I tempted? Because some of the audience will realize "Uh oh, doomed to failure" and some of the audience will say "NO, NO, IT ISN'T DRM. That is to prevent bad people from stealing stuff. DRM prevents me from ... That isn't DRM!"
I thought that at first too. Then it struck me that if every student has one there's not much incentive to steal. Cellphones were desirable objects for many thieves a few years back, but between location tracking and the sheer ubiquity of the things, a cellphone is no longer an obvious grab.
Then it struck me that if every student has one there's not much incentive to steal.
High-end electronics are worth money, money is still worth stuff even if you have your own high-end electronics. I got graphing calculators stolen off of me at a school where my current income would put me substantially below what my classmates considered poor, and I'm a professional engineer.
So then you fall back to the location beacon in the device. you go to schoolbook.google.com/patio11 and there a worm trail of where it's been for the last 24-48 hours. Oh look, it is at Sidney's house.
My kindle seems pretty sturdy (okay, no it doesn't)...but have you ever seen how destructive a 3rd grader can be?
I predict that, if this was tried, not a single kindle would make it through elementary school.