Second, it may or may not be that he lacks the courage. He may lack the desire to go where you suspect that he wants to go. Mostly, though, what he lacks is the freedom to do so.
Just tossing the First Amendment out the window, at the current time, would not have the support of the courts. It would be declared illegal in no time. It would then require using the power of the office to suppress free speech by force - literally having police or military shut down radio stations, TV stations, newspapers, and the internet (don't forget cell networks and ham radios). The military is unlikely to undividedly follow such a course. Now you very likely have a civil war.
So even if he wants to, he can't blatantly toss the First Amendment out the window, and not because of lack of courage. It's because the people won't put up with it (at least not yet).
Trump calling them to heel is just a method of pulling the already right-wing mainstream media further to the right. The far right will never settle for anything less than FOX, and for some of them even FOX is "too liberal".
Reuters' point was that even without the First Amendment and other protections afforded journalists in America, they're capable of publishing important, relevant news anyway. So that's not just a statement of intent. It's deliberately poking at Bannon's bluster. We are not afraid of you. He's trying to intimidate the press, and Reuters, at least, is having none of that.
So Bannon is smart. So what? That won't keep Reuters from doing their jobs.
edit: I should probably add here that I think assuming one's political opponents are stupid is a pet peeve of mine. Of course Bannon is very smart, or he wouldn't be where he is today.