I've occasionally thought (usually while trying to tune up some 60 lbs Wal-Monster bike with useless suspension and barely-functional brakes) that using today's manufacturing technology, it should be possible to build a reliable, repairable, no-frills bicycle that would retail for $100-150, making it accessible to low-income workers and poor students who need inexpensive, reliable transportation. It wouldn't be a high-performance machine or anything beautiful, but it would work and it would be repairable when it broke down. I would also recommend a range of accessories such as racks, lights and fenders that could be sold as aftermarket add-ons.
What it WOULDN'T be is an attempt to emulate some sort of "extreme" dowhill racing bike, with crappy suspension or poorly-designed disc brakes. Much of the investment in the typical big-box bike goes to making it look cool, as opposed to being reliable.
The big obstacle would be in creating a cheap bike that's meant as Basic Transportation, rather than being meant as a toy. Part of the reason that Big Box bikes are so unnecessarily flashy is that they're built as toys rather than useful objects.
These bikes could be sold through bike shops or online. Preferably at a local bike shop, which would be able to easily maintain and upgrade a no-frills machine. If I were to design such a thing, here's where I would start:
Frame- Welded, straight-guage Hi-ten steel, in a fairly upright geometry. I'd keep sizing simple and one-size-fits-many. A smaller bike with 26-inch wheels in a men's and ladies' frame, and a larger bike with 700c wheels in a men's and ladies' frame. It'd have stamped semi-horizontal dropouts like an old cheap ten-speed, and eyelet holes in the dropout for mounting racks and fenders. No need for threaded eyelets, which would add money to tap, aftermarket accessories can be attached with nuts and bolts. American bottom bracket for one-piece cranks.
Fork- Rigid hi-ten with non-threaded eyelet holes for fenders. 1" threaded steer tube.
Wheels- aluminum single-wall rims, 36-spoke with bolt on hubs. 7[speed freewheel rear
Tires- generic semi-slick in 26" or 700c
Handlebars- straight mountain-style bars attached to a long threaded stem for maximum adjustability
Seat- Generic, moderate foam padding over a plastic shell. Use a straight seatpost (long as possible for max height adjustment) with a separate clamp to save costs
Brakes - this is a toss-up. I was going to say stamped sidepull calipers, because they're cheap yet can be made to work, but it seems like linear-pull brakes ("v-brakes") are becoming generic and cheap enough to be cost-effective, and offer better wet-weather stopping power even in their low-end forms
Drivetrain - Single 42-tooth front chainring, 7-speed rear with gripshift
A few bike companies offer an upscale version of this, but usually an aluminum frame, cartridge bottom-bracket, suspension seatpost and a few other frills make them more expensive. If this bike were made with the same production quality as the average big-box Huffy, it would be useable and way cheaper. It'd weigh a ton, and you might never love it, but you'd get to work on time.
Cheap, reliable transportation can mean the difference between a job and no job for a lot of folks, and with stagnant wages and rising fuel costs, the personal car is starting to become an unaffordable luxury to even the lower middle class. In coming years, the humble bicycle will be the most effective and democratic way of getting around for more and more of the population, and a decent cheap bike should be within anyone's reach.