I think you have great potential here, definitely pursue it, develop more (add in stats checking and saving, ie. speed, accuracy, words that result in most errors, like a top player list for some fun competition etc), make it polished and beautiful. Have the options of replacing the sprites to cute-sy stuff that kids would love and parents would folk out $$ to buy for their kids to practice typing.
Definitely lots of schools would be interested in it too.
The reason i say this is your mechanics are awesome, really tight and everything just works flawless. With some help from professional artists you have an awesome overall educational game.