Makes sense. There's a thin line between providing a better reading experience and redistributing someone else's work. Readability/Read it Later/Instapaper can survive because their service is user-driven.
Zite's going to have to concentrate on their recommendation engine (which is excellent) and forget about the presentation layer. Writers have the right to choose how their work is presented. It's not worth it for Zite to try and fight this.
That leaves Flipboard in an awkward position though; their business is all about presentation. Partnerships are a way around it, but I just don't see that being all that profitable.