Definately underestimating it, an old RPI can easily run a full on desktop OS, maybe not like a bleeding edge KDE with all the visuals turned on, but XFCE LXDE, etc... would run fine, libre office and basic IDEs...
but yeah absolutely zero reason to think you'd have even a wink of trouble running terminal based stuff.
I mean if it's already imaged at some level with raspbian or something, technically it's most likely already set up to do the concepts you are looking at without needing to set up a new distro.
So to add anything up to date you would probably need to get a micro sd reader... here in the US you can pick one up for like 5-$10 at walmart, so we aren't talking a huge investment.