I disagree with the article - I think Microsoft did the right thing by starting with the top model in the range.
This first generation of Zune is obviously designed to test the water and encourage feedback before The Big Push. A large HD-based model will appeal the knowledgable technophiles (i.e. geeks!

) and I'm sure that they will be able to give Microsoft lots of pointers on how to perfect the experience for later releases. Less experienced users tend to go for the smaller players and won't put up with having to hack their registry in order to get features to work. Imagine the backlash and negative press Microsoft could have received if they targetted the mainstream straight away.
Zune isn't ready for the big time. Give it a few generations and then Microsoft can take an aim at the market leader.