I think that Herbie comes off a little like Ned Flanders at thefirst season of the Simpsons, before Ned got religious. He probably didn't work because he wasn't as fun as, say Ernie and Bert, or Sherlock Hemlock (each have character flaws and quirks that make them funny, and great to watch). I saw an old Herbert sketch on Plaza Sesamo, in which he talks about squares (don't ask me what he was called, I can't remember). I almost fell asleep.
The only thing I really liked Herbert in was Herb's silly K poem on the old Sesame Letters album (I found an old copy of the cassette version released with a song book circa 1988 in my parents house and..heh heheh swiped it).