There either is a SSH/Telnet Kindlet, but my suggestion is "myts", a terminal emulator. A telnet binary should be installed on the Kindle ready for use already (or does it come with the USB networking hack?).
K3 development is - AFAICS - still active to *some* degree. Truth be told, development overall isn't *that* overwhelming. You only see new software of some greater proportions once in a while. But that's about the same for K3/K4/K5. I wouldn't consider the K3 as dead, yet.
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