Condi did screw up. There was lots of back room rumours about an Indo-US alliance to be announced. The post Tsunami US-India-Japan-Australia "core group" rheoteric was being taken quite seriously by the media. But after the F-16s sale to Pakistan the mood here has changed. India is now wary of an alliance with the US.
It doesnt mean that India has already joined the Chinese camp but just that its a good idea to cool of the relationship with China.
In the shortrun they are still considering the utility of lobbing nukes at each other.
You cannot hold Condi accountable for either party ~ this has been going on for a very long time!