Having used the velibs in my visit to Paris last week, I feel that the article is making the program seem bad on purpose. As a tourist, I found it a brilliant idea.
Typically, out of about 30 or so bicycles in a station, I usually found about 2 in a bad condition. And they were usually NOT vandalized. It was most often a punctured tyre, a bent or missing basket or something similar.
The most serious problem that I found was the fact that sometimes all the docks in the station near your destination would be occupied. I quite liked the bikes themselves, and found them in some respects innovative, but I can't imagine that they cost 3500€. To register in the system you use a credit card from which 150€ is temporarily kept as a guarantee. I can't imagine that the price of the bike is over an order of magnitude more than that.
I wish my home city (Athens) had a program like that.