People tend to overestimate the value of newspaper journalism. Paul Graham does a great job of exploding the myth of business journalism in his "submarine" essay. Financial journalism has obviously been just as bad.
The worst, though, is political journalism. Most "journalism" is simply writers being a conduit for leaks and bureaucratic turf wars. Woodward and Bernstein did not uncover Watergate. They were tools of one branch of power ( the FBI ) that wanted to strike against another branch ( the Nixon White House). The crime was not discovered by journalists, but by illegal FBI surveillance. ( http://www.stratfor.com/weekly/20081222_death_deep_throat_an... ) It would actually be an enormous improvement if these agencies just said what they wanted to say through blogs, rather than filtering it through "journalists".