Do you want to market such a device, or do you just need the ability to limit any device to a single app? If the latter, look into iOS Guided Access:
Actually, the moment you enable Guided Access in Safari, it shows you a list of options specific to Safari, which includes disabling Dictionary Lookup!
It also allows you to disable hardware features like specific buttons, motion control, and even lets you draw on the screen to mark areas to disable touch input in.