I think in a way he's talking about newspapers getting back to their real roots as being genuine 'NEWS' papers. That's instead of the trashy gossip magazines that so many of them have turned in to.
But that is in general. It seems Buffet here is a focusing on specific areas with a population that will be very likely to be interested in a local newspaper. Small, well established towns, with a strong sense of community.
The problem is see with that is that local communities that used to be established and strong can be destroyed pretty quickly according to how the local employment landscape changes (say a GM plant closes).
Witness this: I'm at a graduation celebration in Wisconsin this weekend, and all the parents attending throughout the day are very involved in student athletics. One of the kids was running in a track competition out of town with the rest of the school. The results were texted immediately throughout this small town. Another parent was tweeting the play by play of the track meet.
These are tech savvy 40 year olds, completely bypassing the print world. What can print offer them? Maybe a pic or two? They've got those instantly via FB. If this crowd is doing it, it's over for print papers.
And since online papers either need a paywall or higher revenue for ads, they just can't compete.
A lot of the people I work with rely upon FB to serve as their "news." And I in turn use HN as a kind of news service. I rely upon FB, HN, twitter, and RSS for the majority of my news intake. The problem will arise when all that's left are either blog posts that have variable reliability and wire services that have variable depth.
How many events in that class tend to happen? Anybody who cares about a high school track meet is either there, or connected via Twitter/FB/whatever with the people who are. Larger scale events are bipolar: they're either not of immediate interest (new highway construction announced), ignored entirely by most people (the President is in town), or people want to know what's happening now (chemical spill, bomb threat, school shooting...)
The one thing that can be said about local print newspapers is that they aren't the best vehicle for disseminating any of the above news topics except possibly the big-but-not-of-immediate-interest kind.
Finally, the ultimate fate of the newspaper cannot possibly be understood by anyone who, as in Buffett's case, admits he doesn't understand tech.
I get phone calls from her because so and so that was in my high school class had a baby or was picked up by the cops. It's never to discus the latest city council meeting.