Don't get me wrong on the AP. I don't mind them printing those stories, I just don't need them in order to get those stories.
The place I disagree with you is that, I don't think it's up to me to pay them - in my case The Denver Post - in the hopes that they'll improve their coverage. I tend to think that they should improve their coverage and in return they'll earn my dollar. If I pay them now all they'll do is assume that I want more Broncos coverage, more police blotter stuff, and more reprints.
Currently, I'm more likely to get more investigative type local stories from the more hyper-local news weeklies, than from the Post. Even Westword, which doesn't look good being pulled out of a brief case in business society - does a better job of doing the research and getting a story out.
The "paper of record" label is a burden for the Post that it can't live up to at the moment. I think there's some steps they could do to become relevant - to me - but many of those steps would would be hard for them to swallow. They aren't what they were, and they don't know what they are now. My patronage won't solve that problem for them.