$3400 is only A LOT of money in a poor rural area if it is spent on local, non-traded goods: the consumption value of an iPad 2 is roughly the same in rural China and in NYC. If anything, it may be far lower in the poorer country due to lack of complementing infrastructure.
It actually makes me think that the iPad 2 part of the story may be entirely fictional: perhaps the kid made it up in order to seek publicity and attention.
You are right, iPad is practically useless without WiFi. Still iPad/iPhone are just THE ITEMS to have in China. People in Asia are capable of crazy things for shiny gadgets they can wipe out and show off. Don't underestimate the lust. Especially in a case I think we can both agree is not rational to begin with.
> Under those conditions, is my computer use essentially free?
It's 'free' when compared to an electric heater, but not when compared to a heat pump (e.g. a food refrigerator). Heat pumps can use their energy input to divert heat from a cool reservoir, in addition to simply creating additional heat.
So if you want to generate heat even more efficiently, keep a fridge in your room and fill it with water or soft drinks (water has a high thermal capacity).
It actually makes me think that the iPad 2 part of the story may be entirely fictional: perhaps the kid made it up in order to seek publicity and attention.