Ma, no wires!

Yes, I think that's the best way - ideally you could use the existing network abstraction layer (not socketserver, but network.h)?

I'd been thinking Telnet as the name, but yes you could just hijack USB - it's what I do for Linux. You might find that what I did with libs/bluetooth helps a lot as it's doing almost the same thing?

Whatever it does it'd be great to expose it in a way that could be used in other devices (like WIZnet - ESP8266 AT commands might have trouble since they use JS). As a start, you probably want to develop under Linux anyway because it's so much faster to compile/test/debug :)

Also: realistically you need at least an option to have a password. When the password is entered, I'd look in execinfo.root for a variable like PASSWORD, and check against that. That way, if you have code then there's a password, but if you just reset everything then you can log in fine - but it's not dependent on Espruino being in any working state.