Online news is broken for one fundamental reason: It's currently hard to generate enough revenue from online ads to pay for the creation of high quality content.
This is the only problem that needs fixing and anything else is polishing brass on the Titanic. Fancy news reading systems (Instapaper, Flipboard, Pulse, etc.) are nice because they strip out all the ads. "Wow, look how much nicer it looks! We're totally saving journalism." They aren't. They don't have to pay to produce content, so they can repackage it inexpensively or for free.
The truth is more people are reading the news now than ever before. 16 million people read The New York Times online last month. The print publication peaks at just over 2,000,000 on Sundays.
We don't need better social crowdsourcing of stories. We need more ways to pay for great content.