Last year, we called the Kindle “this year’s Zunetanic, an over-hyped iPod-wannabee.”

A little harsh, maybe, but the prediction is panning out to be true. 

Since then, Amazon has dropped the price for the Kindle, announced a lot more books for the device and sold in modest numbers, leading Amazon to admit that the device was not the iPod of ebooks. 

Even mainstream publications are starting to figure out that the Kindle is an overhyped niche product. Forbes today pointed out that Stanza (App Store link), a free book reading application for the iPhone, has been downloaded more than 395,000 times and continues to be installed at an average rate of about 5,000 copies a day.

By comparison, Citigroup estimates Amazon will sell around 380,000 Kindles in 2008. In other words, Apple’s selling more e-readers than any other company in the nascent digital book market, without even trying. 

Here’s what we said a week before the Zune was introduced:

Without podcast support, the Kindle will be a relatively boring, closed system, like the first-generation Zunes. It will be a Sony Reader on steroids. An interesting gadget.

If Amazon embraces podcasting, though, the company could quickly establish the Kindle as a new platform for consumption of Internet content. Users would have access to 100,000+ audio podcasts, on all sorts of topics. And because podcasting can be used to deliver all sorts of payloads, such as PDFs, it could be used with the Kindle to let you subscribe to daily news updates, online magazines and other free Web content.

We’ll be watching the Kindle introduction with interest. But, unless it supports subscribing to free Web-based content in an open way, we expect it to follow the path to nowhere blazed by the Sony Reader.

There’s obviously a market for the Kindle and the Sony Reader. But, when Apple, or some other company introduces an iPod touch with a larger screen, the days of proprietary ebook readers will probably be over.