I think these traditional media style companies are failing these days because they don't stick it out for the long term. If you look at a lot of the great technologies of the past decade they all started out with a small user base and kept making improvements over the years. They may only have 100K users now, but if they stuck with it for another 4-5 years they might have tens of millions.
At any rate business is survival of the fittest. If the dinosaurs can't keep up they'll go extinct.
The problem with iPad news apps is that they are either free and sloppy or sophisticated but expensive. The Daily was good but expensive. One might argue it's not so if compared with paper media. But often one forgets that iPad is not a traditional paper media. Thus iPad-based news apps should explore new revenue models as well.
An iPad is able to accommodate many apps. Even at a meager $5 a piece, one can easily spend >$100 on apps if one find they are fun, essential or just pretty. And customers pay close attention to such cost, sooner or later. The strategy is to price your apps low and reach as many as you can. Ensure your customers that they don't have to pay much for good solid apps, so that you can keep your customers as long as they keep their iPads.
The same thing goes for new apps; they will not be viewed as traditional media. Pricing them as such is self-detroying.