Terminal IDE and AIDE for Java. SL4A for Python, JavaScript and Ruby. Ruboto. There's a version of Octave now. And I'm sure there's more besides. There are definitely development options on an Android device.
I've been using SL4A and the Jota editor to teach myself Python (professionally, I'm a .Net developer) on my Nexus 7 and I've been pretty happy with it. I can carry it everywhere, and anytime I have a few minutes to spare I can open up the ebook I've been reading, then go to the editor and/or the immediate window and try some things out. And if I'm at my desk, I can use a hardware keyboard, making things even easier.
Emacs improves the possibilities even more. At the very least, it's a far better editor than any of the current editors (unless you're a vim fan using Terminal IDE) for any scenario where you need an editor.
At best, it could get a whole package management system of supporting utilities that are available to it inside its terminal, and becomes a good way to develop with virtually any language that has a compiler that can be ported to Android. Maybe it even gets w3m browser mode, music player mode, and other awesome Emacs-as-OS features.
How is what you want different from what AIDE offers?
With AIDE, you develop an Android app more or less like you would in Eclipse, and it compiles it and installs it into the system like any other Android app. It's in your application list, and you can run it like any other Android app.
I've lost the count of how many times I have closed a browser window while trying to cut text.
