Reading some of the replies above, a few thoughts occur to me.

One reason that Cessna got involved with the Skycatcher and Piper formerly with the Cadet was to get some sort of brand identification. The thought was that a student pilot would want to stick with the brand he or she first learned in.

If there is no step-up to a four seat version of an LSA, then there will be no brand affiliation when it comes time to move up. The Skyhawk and Cherokee lines are not in competition with the LSA manufacturers for that market.

A student CAN get an LSA, a recreational, or a private pilot license in an LSA aircraft. Therefore, it makes sense for a flight school to invest in an LSA for its initial entry students. IF, that is, they believe they will have enough initial entry students to make the payments on the airplane without having to use the same airframe for both initial entry and instrument training.

It is just my personal opinion, but a full glass cockpit for initial entry is a bad idea. We want them to keep their eyes outside the airplane as much as possible. But then again, I may be out of touch on that...I think that all pilots should get some glider (sail plane) time, too.