Remember who you're talking to, Malenko. Howard thinks Tekken is a wrestling game. While I'd never doubt his knowledge or expertise on all things Mortal Kombat, that very knowledge and devotion colors his view of other fighting games, in my experience.
No it doesn't. Tekken IS a wrestling game. Fans of Tekken's devotion colors their view of it.

I don't mean that Ki is a direct rip-off of MK, quite the contrary, it's greatly different on many levels, but it is poorer for the differences and the only high points of the game are the parts it ripped off from MK.
It has this combo system that is just terrible... makes some of the street fighter games look fair and balanced compared ot it. It stole MK's general charcter theme (supernatural freaks) and zero of the characters are original. They are stolen from various games here and there. Yes they didn't steal them right down to the costume, but if you look at some of the body shapes and some of the moves that do these characters look super familair.
Also even if you don't agree with that, in general the character degins are pretty bland. You've got boxer guy (who is SO a rip-off of Balrog), ninja guy, (scorpion/subzero's looks, ryu's moves), generic warewolf (blanka anyone?), generic hot babe (heavily influenced by the mk female ninjas in boht her looks and movesets), fire guy and the giant inhuman boss with extra limbs (yeah that doesn't sound famaliar at all).
A lot of franchises have this problem though... they can't seem to get past karate guy and ninja girl who looks more like a hooker.

The point is, nothing outstanding in the character dept.
The deep storyline is heavily influenced by MK. Of course it isn't the same story, but the fact that they try to tie in the tournament in a better way than "a bunch of guys were invited to a tournament" hadn't been done before mk. Again it's an original story, the problem is compared to Mk it falls flat. Heck compared to street fighter it falls flat. Again, fairly generic story.
The "photorealistic" look of MK heavily influenced the decision to make KI a 2.75D game. Unfortunately, low-end 3d rendering doesn't work as well for realistic humanoids as it does cartoon apes. So it ended up looking worse because they tried to compete with MK's "gritty realism" something that no other quality fighter had at the time.
And of course the reason that people initially purchased the game is a direct rip-off, namely MK's fatalities. Sure at this point there were other games with finishers, but they were all stinking turds that nobody remembers anymore. MK started it regardless.
So I'll modify my original statement a little bit for clarity.
KI was HEAVILY influced by MK and other promenant franchises at the time. The problem with it is any idea they took from another game wasn't implemented as well as the original. In terms of original content and gameplay mechanics it doesn't have that much to offer and due to there only being two games released very close to each other, it doesn't have the nostalgia appeal that some of the other franchises have.
So I guess you could say that KI is a lame rip-off of multiple games.

Don't get me wrong, I had fun with KI (particulalry KI Gold) back in the day. I just never anticipated the next release nor did I miss it when it faded into obscurity.
Couple that with the fact that M$ owns the company now and that they don't like to take risks, it seems unlikely that we'll get a release. It might be fun just to see what they could do with it, but I don't think I'll miss it.