I realize what you're saying, but really, local news will always have a geographical monopoly.
Can the NYTimes or WSJ even think about covering local issues? How will investigative reporting function for say a local office holder or a local environmental problem?
To my knowledge the real problem is that the traditional business model supporting reporting has dried up. Running classified ads or selling marketing inserts is an obsolete practice. This doesn't really change the need for local reporting though.