The line between professional blogger and professional journalist is an increasingly murky one (from day to day I'm not even sure which I am, but its definitely one or the other), and even if some of the major "dead tree" media sites haven't figured out how to make money there are a lot of others that do, albeit on a smaller scale.
But is that really a problem? I look at it like the OSS industry: there may never be the sort of revenues in the free software world that there was in the commercial software world, but plenty of open source projects/companies are profitable, and so long as the product is better, who cares?
Google isn't the problem here, and they're just being used as a scapegoat because they make money and other people don't. But I don't hear Canonical griping to HP just because HP is making a profit on their hardware and people just download Ubuntu for free, one of the few things that makes an HP system remotely usable.
The "old media" types have an outdated business model, but they also increasingly have a credibility problem. Most of their highest priced talent has gotten very sloppy in recent years, and a lot of them just pick their favorite politician or party and parrot the official line until told otherwise. Show me a well known newspaper columnist of the last ten years and I'll show you someone who has repeatedly claimed Iraq had weapons of mass destruction.