Exactly. Blogging allows subject matter experts to easily, cheaply publish, be widely read, and compete for eyeballs with the MSM.
There's no way most people who just went to Journalism school can compete with, say, an experienced Constitutional lawyer like Greenwald or Lessig, or hacker like PG or Spolsky, or VC like Fred Wilson etc.
But there are some things MSM can still do - good professional journalists can still round up experts and put together a composite of their views. Or they do real investigative journalism that bloggers may not have the resources for, be it Bloomberg suing the Federal Reserve under FOIA [1], or sending reporters to hotspots for first-hand reporting.
Personally I think a combination of data journalism and investigative journalism (like WaPo's Top Secret America [2] and Bloomberg's FOIA lawsuit and reporting) are their best way forward. Both require resources most individual bloggers can't provide, and both are real news, real journalism.
[1]: http://www.bloomberg.com/news/2011-12-23/fed-s-once-secret-d...
[2]: http://projects.washingtonpost.com/top-secret-america/