For a simple SDK rootstrap to link against, building on-device is easy-peasy. You could simply get a base system, build dependencies and a native compiler.

It'd also have moderately okay build times - I had no problem building Hildon on the N900, so a moderately-sized program builds just fine on an ARM machine. Just don't try to do things like build kernels on-device. Say hello to swap hell if you do during the linking stage.

Now, who's up for making and maintaining Mer ARM rootstraps with the right build tools?