In the middle is what is being lost without news organizations. I'm not saying that it can't exist, it just doesn't exist yet. To fund this kind of reporting (which takes time and people) you need a revenue model that can support it and you need that journalistic ethic - the one that tells you that losing money on something is ok because it serves the public good. This ethical stance is the one basically only left amongst major newspaper organizations (the national TV news used to have it but they forgot it years ago).
Great points. This is one reason 'serious journalism' is threatened. Reduction of news teams, outsourcing of news bureaus, foreign correspondents mean the tasks you mention are not done to the same level. WIll the profession bounce back, adapt? Of course the next generation ( http://www.holovaty.com/resume ) are already at it and there is always the BBC, CBC and ABC.
But "Reporting" isn't blogging. It isn't even "writing". It's going out, learning about a foreign subject in a day, driving/walking/tramping all over the place, interviewing multiple people, establishing government, police, underworld contacts, getting double and triple confirmation on key facts, adhering to rigorous journalistic ethical standards, etc. That's reporting and it isn't fun, and almost no bloggers do it--just like almost no open source writers write accounting software.
The first fatality will be local news. God knows why anybody subscribes to local papers, but they do serve the purpose of keeping an eye on local politicians, who have a tendency towards corruption. Once the local rags are gone, I dread what will happen to municipal governments...
Does the average blogger want to sit through the Lions' club chicken dinner every Sunday in order to hear the latest about councilman X. Didn't think so...