Without a harddrive, linux OS will be pointless since the amount of applications will be limited. IMO this will always be infererior to a PC, and you can always just use a wiimote or 360 controller on a pc if thats your hangup.
Also the article says that the release version of this potential software will not have any illegal components. Im sure nintendo realizes that despite its legal intentions, it is a doorway to usage of their system in a way they would disapprove of.
All im saying is that it doesnt seem likely that nintendo will say sure why not.