The future of local newspapers is local bloggers. Simple as that. Call them "stringers" if you like. But if you're going to build a bridge from the past to the future of journalism, you'll need bloggers to help build it.
It's not because their bloggers, either - the people that local papers need are bloggers because that's the easiest way for anyone interested in local affairs to publicize them now. John Dvorak was onto something when he coupled the decline of newspapers to the decline in local reporting.