Interesting find, Ken. My first G&L was an SB-2 (2nd gen) and it was years later that I heard about the whole "student bass" designation. I think I must have laughed my head off because at the time that bass put every other I'd ever played to shame. I've also heard rumblings that SB stood for "standard bass" but that seems even more vague in a way.
I guess you could consider the slab bodies a budget feature since they represent a shortcut in manufacturing. And yes, the controls are relatively simple on the SB and SC models (I once wondered why the guitar model wouldn't have been the abbreviation for "student guitar," until I realized Gibson already had a claim on that one). But like you say, everything else is pure G&L goodness. I guess the slightly smaller body could have been aimed at the still-developing (physically, that is) player, but I know plenty of adults that like these guitars specifically for that feature. For that matter, I also know a few players who have an aesthetic preference for slab bodies (ASAT, anyone?).
I wouldn't put it past Leo to have been fully aware of the warplane, however. I have two G&L guitars, both F-100s which are not to be confused with this beast (note the "Sabre" tie-in and it starts to become obvious that Leo was thinking along these lines even before G&L was incorporated):
http://en.wikipedia.org/wiki/North_Amer ... uper_Sabre
Funny this should come up today, because I just snagged a 1st gen SB-2 off the 'bay this afternoon. Can't wait to see if it makes me feel younger and less experienced to play it.