I have been working with blogs and blog-like technology for many years. The transformation of the tools in terms of cost, ease of use, and capabilities has been amazing to watch.
We have blogs on the "blogger" platform run by Google and the "wordpress" platform, which can either be self-hosted or run on the wordpress.com free sites (you get ads in some of your posts, and can pay a bit more to have those ads removed).
Regardless of the usefulness and / or future of the blogging format, here are some of the advantages that have come up over the last 10 or so years in terms of technology, cost, ease of use, and capabilities:
1. Cost - the software has always been free from either Blogger (Google) or Word Press (Open Source). However, many people chose to self-host for many reasons, and the cost of hosting has gone down dramatically over the years. The "free" alternatives are also extremely robust
2. Performance - the performance of the sites have exponentially increased in terms of speed, although it is difficult to quantify the differences in terms of the general increase in overall processing speed (bandwidth) on the part of the consumer as well as the provider, which is also tied to the reduced cost / MB of a high speed connection
3. Stability - Stability used to be wobbly on some of the sites, particularly from the administrative perspective. We used to have to save our posts all the time in case the site crashed, and fixing items like categories / tags used to be a lot of effort and painstaking. Many of these problems seemed to have gone away or are significantly reduced on the major platforms
4. Features - Many, many things you'd want a blog to do are built in. Not just the traditional items like links, categories, tags, photos, polls, but also more exotic items like linking to different media and different sorts of geographic data. Advertising is also built in, but since we don't advertise, I'm not an expert in this, although I assume this is crucial to many people
5. Coding - you used to need to know some HTML or other languages in order to work effectively with blogs or to deploy the most advanced features, but since many of those capabilities are now built into the tool, this is less important or hardly needed at all
Something also happened to make blogs more useful which doesn't have anything to do with blogs directly - the mobile revolution, along with tablets. Tablets make formatting much less of an issue, because it is handled by the device and you can zoom in or out and go landscape easily. Formatting items that were all-consuming in the PC world are much less important since the customer (or patron, since they often aren't paying) can do this themselves.
Blogs also looked "crappier" than professional web sites, but currently a skilled programmer can build what looks like a completely robust site with these common place tools (plus programming knowledge, in some cases). Not only are blogs on these sites, but their main web site for companies like VW are also built using word press (see here for a list if you are interested). Major companies and groups don't seem to use blogger or I can't find the list.
Of course what actually happened was Tumblr, which leaped past these blogging tools in the general public and even has its' own "symbol" alongside the inevitable Facebook and Twitter icon. Since I know little or nothing about Tumblr, I can't comment on the relation but it definitely is more photos / music and less about long or medium form writing and is generally considered a "microblog".
From the perspective of a blogger, one issue is how to bring attention to anything but the newest items on your site (or how to get people off old material that is high in the search index and onto new material). I don't know. You can put up categories, tags, or even do what Jonathan is doing at Chicago Boyz with "rerun". I used to occasionally put up "best of the blog" but this became difficult to impossible as the quality and variety of our content increased.
As the blogs look more professional and the news media becomes more fragmented, the line between the two gets blurrier. Likely to someone who is in their 20's a high profile blogger that they have followed (not necessarily as a blogger, but as a custom blog or site) would have as much credibility as a traditional source on a narrow topic, the same way in which many people get their news from satirical sources.
Of course, none of this may matter at all as Facebook steamrolls everything in its path, or Twitter, or similar and evolving tools. Many times they are passing along other stories though, especially when you only have 140 characters to work with in the first place, so they can also drive traffic elsewhere. Lately I have begun noticing that advertisements often don't include web URL's, they include Facebook or the "scan" code instead.
Since we don't try to monetize most of our blogs (we are part of blogs that do advertise, and we certainly don't have any problem with that) we aren't as attuned to these cultural or technological shifts in adjacent fields unless we participate ourselves. In our little world Dan is far more attuned to social media than I am.
One thing for certain is that someone who was teleported from the early days of blogging into today's tools (especially the free ones) would be utterly amazed at how much can be done so quickly and at such a low cost, as well as how damn good it all looks on the tablet. Whether the content is any good, however, is the age old question.
Cross posted at Chicago Boyz