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Usually when someone busts out the phrase, "so funny, [they] forgot to laugh," the implication is that the comedian wasn't funny. It is an insult.
Here, however, it is an apt description of what Colbert accomplished at the White House Correspondents' Association Dinner. He was fantastically amusing, in a mean-spirited sort of way. And the response he received from most of the audience (heartening exceptions included Antonin Scalia, Joe Wilson, and Helen Thomas) was tepid at best. Part of it was that they were the butt of his jokes, and it is hard for anyone to really laugh at herself. But part of Colbert's brilliance was that it was almost too funny for the audience. As Scherer points out, irony is a dangerous form of comedy. But when done right, it leaves the audience with the odd state of being: it was so funny, they forgot to laugh.