ifconfig doesn't work with SD image

I am trying to ssh to the galileo via ethernet after giving it an ip address through the code:

ifconfig eth0 169.254.1.1 netmask 255.255.0.0 up

but it spits out an error

ifconfig: SIOCSIFADDR: No such device

I have loaded the iot-kit SD image found here and have reflashed it multiple times. The above command works fine with no SD card in the galileo board. Any idea whats happening here?

As a side note when I try to use:

telnetd -l /bin/sh

it gives me an error

/bin/sh: telnetd: command not found

This also works without the SD card in the galileo.