I suspect their standards went long before the readership did. The Rekha Basu's of the world were hired when newspapers ruled the earth.
But using the "competition" excuse to explain why noone reads the newspaper anymore is their reason for continuing to suck.
For sure, competition is part of it, but look at when Basu was hired, and their shift from journalism to advocacy, and you'll see where the real problem is.
Newsgathering in the print media is just about dead. Just an example: I, along with a bunch of other people make a hobby out of exposing "fake" veterans. Our number one source of fakes is the print media. A newspaper runs a story about a decorated local veteran, who lots of times isn't even the right age for the b.s. story they tell. We then FOIA this dude's records, and give that to the reporter, and sometimes even the cops. Nearly 100% of the time, the reporter then disputes the facts and defends their story. Every once in a while, a reporter will get angry for being deceived and come down on our side, but generally not.
The thing is, the "story" is generally patently false, and a single phone call would've exposed that, but the reporter is too unskilled/eager/stupid to do their job correctly.
But that is the state of the print media, today.