What never seemed like a good idea has been dumped: Verizon will "phase out" its Wi-Fi hotspots in New York which were attached to payphones. Verizon never integrated these hotspots into anyone else's network, which means that only their DSL subscribers had access. This is a sure strategy for disappointment, of course, because the idea of wandering around to find free access at phone booths was always bizarre. If Verizon looks to this Wi-Fi network as proof that Wi-Fi hotspots are a failed strategy, it explains some of their very bizarre public statements on how Wi-Fi works.
I'm surprised you thought it was never a good idea. It seemed like a perfectly fine idea. The point wasn't for it to be connected to another network, but to offer an easy additional service that no one else could match in the area, as a way to keep Verizon DSL subscribers happy.
I'm in Manhattan right now, and I can tell you that just about everywhere I open my laptop, I see a Verizon SSID. So it's not about searching for a public phone. The coverage is pretty good.
What it was about was reducing churn -- and Verizon has said in the past that the program was a huge success on that front, more than paying for itself.
So, I have trouble understanding why this was a bad idea, and am quite suprised they're killing it. My only sense is that they got pressure from the EV-DO folks who thought it would compete.