The problem at the moment is that the web is awash with free content, and in a competitive market the price always converges on the marginal cost – which is currently zero. But as providers disappear (or, like Murdoch, decide to charge), the supply of free news will diminish and something more like a normal market will emerge. Only then will we find out what people are willing to pay for news.
As I stated many times before, my goal with Adblock Plus isn’t to destroy the advertising industry. In the end, the Internet does need money to run and ads are still the most universal way to distribute that money. The only problem is that ads are becoming increasingly intrusive and annoying as webmasters try to maximize their profits which is the main reason people install Adblock Plus. So the idea is to give control back to the users by allowing them to block annoying ads. Since the non-intrusive ads would be blocked less often it would encourage webmasters to use such ads, balance restored.