I think there are a number of reasons why Rush succeeds where Franken failed. Some of them have to do with the fact that Limbaugh knows radio - he worked his way up from nowhere as a DJ and paid his dues in the outlands for years while he learned what worked and what didn't - and Franken came out of TV, which is much more scripted. You have to think fast when you're dealing with callers, and you don't get that kind of practice working on Saturday Night Live. Secondly, Rush is and has been operating in a target-rich environment. If your main shtick is ranking on the mainstream/drive-by media, it doesn't take that much work to come up with a dozen talking points a day, and if you're also teeing off on the wacky weirdness of the loony left, that's even more material to work with. Hollywood, on the other hand, has been mocking the God-fearing, hard-working blue-collar folks (to say nothing of the Republicans) for years on three commercial and one "non-commercial" networks, so it was hard for Franken & Co. to come up with something new that didn't sound like it came straight from the conspiracy-addled fever swamps.
It's also worth noting that very few successful talk show hosts have started at the top of the business. Most of the really successful ones (Rush, Michael Savage, Sean Hannity) started as local hosts and moved up the food chain in Rush's wake after program directors realized there was still gold in the AM hills. I think Bill Bennett and Michael Medved* are the only folks in the business to have any kind of reputation before they got into talk radio, and they're very recent arrivals on the dial. It's not an easy game to master by any means; just getting on the air and raving for three hours a day doesn't cut it.
So...Air America started without very many talk radio pros, and the ones they did have weren't exactly top-shelf talent. They tried to turn actors and rappers into talk show hosts, which didn't work very well, and they were pushing a message which could already be found on just about any other media outlet you want to name, except for the handful of radio stations carrying conservative talk radio, the Fox News cable network, and a corporal's guard of editorial pages, mostly in tabloids like the New York Post and the Boston Herald. The surprising things shouldn't have been that FrankenNet failed, but that they managed to last as long as they did.
*OK, there's Jerry Doyle, but unless you're a serious B5 geek, you've probably never heard of him.