Dan Shaviro, in his "Start Making Sense" blog (here, scroll down for specified articles), considered the "Incentive Problems Caused by Journalistic Balance." He notes that the "he said, she said" game has been around for a while, but everyone has assumed that there was actually some accountability somewhere in the process, so that stating the truth counted for something other than just balancing out the other side.
The Bush Administration, on the other hand, has figured out that there is no accountability these days, with a press that is too "stupid, mindless, timid, self-serving, cowardly, incompetent, ignorant" to follow through. It has exploited that discovery to the hilt. With a blatant unconcern for what the facts actually are, each person from Bush to Cheney to McClellan stays "on message" no matter what the questions are. No answer, but a powerful repetition of the world according to the neocons.
This is perhaps most obvious when it comes to the Administration's position on torture. Shaviro provides the following insightful commentary in another article, "Is this why the Bush Administration is so keen on torture?".
"While torture's efficacy in getting people to provide true information is disputed, no one doubts that it works extremely well at getting people to say what the torturers want them to say. The likes of Cheney might be keen on this for either or both of two reasons. The first is that they are just trying to make a case, and don't care if the statements extracted through torture are true or not. The second is that they already "know" what is true, on ideological grounds, and thus regard all actual empirical evidence as false unless it confirms their fixed preconceptions. Not only don't I know which rationale was more important to Cheney, but I'm not convinced that he knows the difference any more." [formatting condensed]
The negative impact of mindless "balance" is a loss of the ability to make credibility judgments and the loss of accountability. Cheney's perspective on torture is just an example of the way manipulation of information can lead to a dogmatic inability to assess rightness or wrongness of the two "balanced" sides.
Perhaps the answer is to keep encouraging people to read the blogosphere. With commentaries like Shaviro's, there is hope that fuller information will be disseminated more broadly and more thoughtful observations about what that information means for today's society will be shared with a broader audience.