The market is properly weighted by dollars, not by number of people. A 100,000 people each willing to pay $200 a year for a subscription is a larger part of the market than 5 million people that will collectively click on 20 million ads in a year that generate an average of $0.001 for each click.
If people are willing to pay you a premium, you don't need to capture "a majority of the news consuming market", you just need enough of those people to be profitable. Ben Thompson at Stratechery says he has a little over 2,000 paying subscribers- a tiny fraction of paying WSJ subscribers, never mind the people reading free content- and he's doing fine.
In fact, that's a known winning strategy in a lot of industries, not just journalism: let the suckers rip each other to pieces in the race to the bottom, while you deliver enough value to have fat margins. That's what Apple does, for example.
I think it is relevant, the WSJ has a lot of digital subscribers and they're profitable I think in large part due to their paywall. FT is also profitable and employs aggressive paywalling. I've noticed smaller local publications tightening up their paywalls, as well.
I'd expect to see more paywalls going forward, not fewer. I think there's increasing recognition that the economics are better.
