There certainly are a lot of areas in which the model you propose has been and will continue to be extremely successful: providing a specific group of people - preferably domain experts of some sort - with the knowledge they need remains a business model. In a way, this is also what the 'hyperlocal' people are trying to do; everyone is an expert on their immediate neighborhood and thus information about that should have a great value to them.

But there's another side to news: it's also the glue for society and this part depends on not being targeted at any specific group but at the "mass" as a whole. That's the part mainstream news has been trying to serve. But now that eyeballs are only worth something if you know who they belong to, this model is collapsing. In my previous post, I wasn't trying to argue that what these organisations are doing is sustainable, but thus far it seems to be the only pattern we have to commercially serving the whole of society. This mechanism failing is the real problem, because it's a central part of our democracy and culture.

Also, the quality criteria in this area are only tangentially related to factors like "truth" and "depth of reporting". A lot of the emphasis, instead, is focussed on aspects of commonality and actuality. Yet, when people argue that "good reporting" is what we need, this is often not what they mean.