CLEARLY I DISAGREE. Gah, do you think I didn't consider the context? Amazingly, I DID! Only on the internet, eh?
They're not fine because:
A) They're trivially expensive from low levels.
B) They make every other light source, including all the ones you, the DM, might be considering in their dungeon, utterly meaningless unless for some inexplicable reason the players choose not to use them, or stealth is being used and no-one has one of these turned on.
C) They DO NOT make any sense even in a magical context and assuming they purely emitted light, because sheer AMOUNT of light even a bloody "magickalelele" world, needed to "brightly illuminate" roughly 100ft will BLIND YOU REAL GOOD if you look at the source, and everyone standing behind the guy with the sunrod would be dealing with horrible after-images and generally the whole thing seems fundamentally ludicrous.
In a magical world, I can see a safe, non-burning, pure-light emitting alternative to a torch. I don't see, however, why it should be AMAZINGLY BRIGHT to the point of being patently ludicrous and making every other light-source pointless. Sunrods should be clean, safe magical alternative to torches (with a similar light radius), generally only used by adventurers due to their cost. Not some sort blinding space-flare which completely removes darkness for 100 feet.
This would also leave some room for other, cooler magical light sources, and make the wizard's floating light not entirely pointless, perhaps.
That's the thing about sunrods. They're not cool. They're not rocking. They're just "Ok let's forget about any lighting rules indoors". And whilst that works for some people, for me, I think the whole "light in the darkness" deal is cool.
If it is a typo and it's meant to be 5 squares or something, then that's cool. I just don't think it's a typo.