I believe complacency to be more endemic than illiteracy in America. People consume news in a myriad of ways. Trying to say newspaper reading would resolve some problem is silly.
Perhaps newspaper reading is not so common and complacency is more widespread in the US, I don't know, but some forms of media are more suited for more in-depth analysis while others are not. I'd say that the newspapers format gives the publisher space enough to give needed details on subjects and the reader can peruse it in the speed one needs to comprehend and analyze it. Actually, this goes for most written media.
Of course, newspapers per se don't solve problems but I think that a literate people can make more informed decisions and thus have a greater chance on making good decisions.
Good journalists are good journalist, no matter which medium they use to distribute. You can find good journalism from professionals in print or online or even from bloggers. Going by your standard, every citizen should be required to read BOOKS in order to get the depth of analysis that they sorely need to be wealthy.
Wealth is neither here or there. Or did you mean intellectual wealth?
Well, I'd say that newspapers, in print or online, or blogs are all in writing. Thus more or less equal in potential power. There we seem to at least mostly agree.
I guess I was guessing that if people in the US didn't read newspapers they got at least some information from alternative sources. The ones I could quickly think of where all non-written, e.g. TV or youtube. Those would, in contrast to the written ones, generally not be as well suited for in depth analysis. My guess could, of course, be widely off.