For that matter, if they do go down, what happens to the archive? I hope that something like Wikimedia or the Internet Archive gets access to it, so all that information isn't lost forever.
The problem is likely twofold:
1) Print is expensive. 2) Internet ads don't pay like print ads used to pay.
Okay, threefold:
3) Craigslist has killed the classifieds market dead.
Newspapers around the world are suffering from these things. It's just acutely sad that the paper of record is no better off than the rest....
Speaking as someone at a newspaper, I can tell you that the NYT is better off than many of the rest.
In short, they've been making moves towards becoming an Internet company for longer than others, as evidenced by their 100+ person development team, use of Ruby on Rails for major projects, and overall technical talent. That is a unique position among newspapers.
As it stands, pageview content ads don't generate enough revenue to run a paper using a print newspaper inspired business model.
They have experience with that via About.com. How much better could the NYT do then About?
Not saying they definitely shouldn't do it, but definitely not for the ads. If they could get archives-to-print conversion without cannibalising any other businesses that rely on owning content, maybe they could break even on lost subscriptions. Maybe not.
There is no shame admitting defeat if you're doing it wrong.