There are various VoIP and SMS-over-IP services (notably Google Voice) that can turn an iPod Touch, or unactivated Android device, into a perfectly serviceable phone, so long as you're near a WiFi base station. If you're willing to go with two separate devices, then maybe a MiFi device might fit the bill as a second gizmo.

For what it's worth, my 7.5 year old daughter is quite happy with my old and no longer activated Droid X as her "phone". She can play a variety of games on it, and I've separately got a Samsung Chromebook that she can use for all the Flash-based web sites that her school wants her to use. If/when the day comes that she needs to text back and forth with her friends, I'll initially just get her a Google Voice number and we'll see how that goes. By then, I'll presumably have more hand-me-down stuff that she could use.

Now, here's a different but related conundrum (not exactly a thread hijack, but...):

I've got one year on my Verizon lock-in, started when the Galaxy Nexus came out just over a year ago. At the time, the only thing my wife wanted was a dumb feature phone, so that's what she got. I've got the grandfathered unlimited 4G LTE plan. Together, we're on a family plan that gets 20% off list due to a deal between Verizon and my employer.

What's changed in the past year is that my wife has several friends who live and die by SMS texting. She can do it from her dumb feature phone, but she's getting itchy to give a proper smartphone a try. There's no easy way to add a smartphone to our current plan without restarting the two year clock and shifting to one of these awful new plans which have anything but unlimited data.

For the next year, until the lock-out expires, she's willing to put up with her feature phone. After that, though, it's going to be time to jump. If we were to jump today, the answer would probably be one of the many various ways of getting service from T-Mobile (either directly or through Walmart). I'm just hoping that Google announces something cool between now and then.