Unlike other forms of digital media, like music or even videos, the average news story is fresh for less than a day--and in some cases, it's irrelevant in minutes. In the time it takes to fill out a registration form to get to paid content, users can find the same story somewhere else. Because this type of digital content doesn't hold its value, there is no reason for publishers to hoard it, or for users to pay for it.
Digital content is a commodity
High-quality reporting takes time and expertise, but unfortunately, it isn't worth a lot because there's just so much of it. Once a story gets broken online, the facts will be repeated across the Web within minutes. Stories that aren't referenced are simply repeated. Putting your story behind a pay wall means it will be late, read by fewer people, and left out of the global discussion.
Digital distribution is free
It may seem obvious, but this point is often lost when traditional publishers decry the state of the media industry. It certainly wasn't mentioned when Congress held its hearings last week on the state of the news industry. Digital distribution is a huge boon for publishers. It costs the same to reach 100 people as it does to reach 1,000, or even millions. Local papers now have global reach.