I don't think this is happening to journalism as much as journalism as an industry is doing it to themselves. I say this with the perspective of starting a local magazine in the early 2000s and running it for 10 years (and it's still going relatively strong after I moved on).

Over the past couple of decades, I've watched as media companies with legacy business and editorial structures are (largely) unwilling or unable to adapt to new channels of disseminating important information or driving revenue. At the same time they've eroded trust with their audiences through efforts like advertorials in magazines and over-reliance on syndicated national/regional content in newspapers...and pandering in both. The ones that haven't are doing well.

I remember a few years back reading a great piece by the great late writer David Carr who talked about SXSW and the local paper in Austin that spawned it as a great counter-example for how modern journalism as a business can be done well and successfully:

http://www.nytimes.com/2009/03/23/business/media/23carr.html

Those running the big media properties are either going to finally wake up and adapt or die off...meanwhile, there are lots of niche publishers (and I use that term very broadly in terms of channels) will step up and successfully fill the voids they're leaving behind.