Pupils who read all night long may be very sleepy in school on the next day.
A useful function for Sugar could be a scheduled "Lights out" time as in a boarding school. The function probably would have to use the school server as a time server.
During the night the laptop could refuse to display anything but a clock.
The laptop could also have a defined amount of unscheduled "book time" during which the laptop would only be usable as a book. This would only apply after excessive non-book use. Scheduled book time could allow one hour of reading in the evening.
The laptop could suggest a "computer break" after every other hour (or a configurable interval, see parent cooperation) of continuous use.
Pupils could be allowed to use the laptop at night during a limited number of exceptions. Mentors should be able to monitor exceptions in order to be able to discuss potential problems. Night-time use of the laptop can be used as a scarce resource and be used to train responsible use. (A psychological effect of prohibiting night-time use entirely could be to make it artifically interesting instead.)
Such a function could also be used to invite parents into a cooperative decision making process about parenting in order to define a common standard for a class: The parents are asked to agree on a common "Lights out" time for all children in a class; the time can require adjustment every year.