This is exactly how it's done in many places. A 10yr old computer is perfectly fine for this, maybe even older. Yes it might not play all youtube videos, but it works.
The better question is what the used enterprise computer market is in India. Given that engineering salaries are no longer an order of magnitude less than the USA, I would assume that there would be a large secondary market of sub $200 laptops and SFF desktops. Is that not the case? Do businesses keep them till the wheels fall off? Do they get exported overseas? Can schools not compete on price with middle class consumers for used computers?