What's the alternate business model they're supposed to use?
You can ban sandwich shops in your city, and there wont be a viable model for sandwich shops.
No one banned sandwich shops (or paywalled newspapers) in this context, though.
The problem is that some "sandwich shops" wants to give out free samples (i.e. keeping paywall open for bots and other clients that don't run js), because they know it's good for business, and then complain that people are taking free samples.
Well... if this "handing out free samples" approach is not working out for them, it is up to them (and not everyone else) to figure out something that works for them.
If not enough people are willing to pay full-price for their (I assume) high-quality sandwhiches, and much rather source their sandwhiches from somewhere else (if there are no free samples to be had), that's not anyone's problem but their own.
You're making it seem like there is some regulamentory issue that prevents them from having/deploying a successful business model, when that's not the case: the problem is something else.
Consumers saying come up with a business plan that gives me want for free in return for nothing are in for disappointment
The old business model failed when people stopped buying physical newspaper copies and this is what they came up with. It was unpopular from the start and lead to many papers struggling, so I'm sure they've thought about alternatives harder than the average social media user. I'm all ears in case you have a good idea though. Remember the goal is getting money to pay the journalists and other expenses.
If people were hitting a hard paywall, Google tended to penalize the result. A lot of sites ended up with a looseness in the paywall basically to ensure people landing from a search result got "first page free" style visibility.
I feel like the key is to realize the difference between "news" and "editorial" content. A lot of "news" is begging for a race to the bottom-- I can get the latest Covid numbers, sportsball score, or the fact a water main burst on 12th street from 5 local TV channels or two or three newspaper-format sites. You can't really compete by providing a premium product for those things. On the other hand, the editorial content-- the op/eds, the bespoke columns-- that's where you can justify a paywall.