Well, they are not just removing all Spanish news sources from the Spanish Google news site, they are removing the Spanish Google news site, which seems pretty consistent with his characterization.
Effectively, no Spanish-Spain news in Google news. I wonder if other Spanish-speaking versions of Google News will still link to major Spanish newspapers that are also popular in South America. I'd expect so. Many Spanish sources will actively try to get into Google News from other countries so they can bypass this levy and prevent the loss of traffic/relevance somewhat.
It is already an achievement to write the headlines of the news and to rank the importance of a piece of news. I consider this and all the editorial also as content.
With Google Search, Google does the ranking etc. and provides a substantial own service on demand to a specific search. People always go to the original site if it fits their search request. All good here. But with Google News they just copy the headlines and parts of the articles. They present it, kind of republish it in opposite to creating a search service.
Personally, I'm a bit pissed by the Google, Microsoft, Facebook, etc. because of their sneaky busines concepts. So my post is hostile (which it shouldn't be, but happens ...), but not insulting towards Google.
If they don't want Google to link to them, they can control that through robots.txt.
You may remember a recent German law that allowed German news sites to charge money for this, and Google removed links to news sites that didn't want to be listed for free. Pretty soon, all sites allowed Google to link to them again, because the loss of traffic hurt them.
Basically this amounts to the question: should search engines and aggregators be allowed to exist at all? Should we go back to the pre search engine days when you could only find new sites when someone discussed it on usenet, or through web rings (a network of sites about a similar subject where each links to the next one)?