No, traditional media is going under because people stopped consuming solid journalism in favor of TV news (ugh), gossipy web sites (ugh), and other competitors for our attention like reality shows and social networking web sites (UGH). Fewer readers means fewer advertisers means depletion of resources means trimmed coverage... and the cycle begins again.
Most major news organizations missed the boat on the economic crisis, although remember the Times was a finalist for the ’09 Pulitzer Prize in public service for its coverage of that. Their write-up, in part, read: "For its comprehensive coverage of the economic meltdown of 2008, setting a standard for depth and sophistication while making the arcane world of finance and banking accessible to an often bewildered public." I have a feeling you'll chuckle at that, Meohmy.
But I digress, and respect the opinions of you and Roadbikerob, two smart dudes.
Disclaimer #1: NYT gives me my paycheck every two weeks.
Disclaimer #2: Meohmy has a special interest in economic and foreign policy writing and has strong feelings on the issue.
Yes, those are apt reasons as for the downfall of traditional media. However, I think you forget to include the rise of new media as another reason.
The internet has become the third most popular source for news for adults, trailing local and national news stations. http://news.yahoo.com/s/afp/20100301/tc_afp/usitmediaindustrynewspaperstelevisioninternetpew
So while the majority have fallen into the trap of "tv news" and not reading, those who seek real news are going elsewhere, as tv news is nothing but a sad joke, and the traditional media has failed.
And yes, you are correct, in that I laughed (scoffed) at the NYT being a finalist for the Pulitzer for it's [in]comprehensive coverage of the economic crisis. Although, personally, I don't think the Pulitzer has, unfortunately, much prestige in its name (at least in my perspective). Although I have to clarify, that's more for the peace prize than anything.
Disclaimer: I work in 'new media'. So I am biased in my perspective, but I also see this trend up front. I work for a non-profit, but we run a news site, and it's the number one website on globalization on the internet (according to Alexa), and we get millions of hits a month, and more web traffic than any major think tank. 'New media' is without a doubt playing a part in the downfall of the newspaper.
Having said that: I don't think the destruction of the newspaper industry is a good thing. While I would never rely upon the NYT or Washington Post to provide accurate coverage of foreign policy or economic situations, I do use them in my research of such topics, I just also happen to use more papers from the U.K. (which has much better newspapers than anywhere in the US), mainland Europe, Russia, China, the Middle East, Africa, South America, etc. That way, i only rely upon the NYT to fill in the holes in some areas. In this sense, I wouldn't want to see these sources of information disappear, as a researcher, I want more, not less. It would be nice to imagine a dream world where the fall of newspapers might actually boost their journalistic enterprise into high gear and make them challenge power, instead of being subservient to it, but alas, pigs have yet to fly.