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TinyCore does this, I think; by default files and applications go into session storage (cleared on logout), but they can be moved/writted to persistent storage. I have to say I digged it, and I wish the driver and application support was better (but then it wouldn’t be so minimal)
They’re already putting out a petition so they’re not wholly against the idea of an EU-Linux.
Also, this has been done before by other governments, like parts of the UK’s and many Indian governments.
I think it’d be a big step, but a doable one and for the better.
Why do you compare it to destroying and rebuilding one of the EU countries, if I may ask?