Virginia Postrel in the NYTimes talks about economic models for media bias. That media bias may simply be market differentiation. She says:
The article makes some provocative predictions. It suggests that adding relatively moderate competitors may push rivals to take more extreme positions to hold onto their audiences.
Trying to correct Al Jazeera’s bias, for example, by introducing pro-Western competition, as some analysts recommend, “might cause Al Jazeera and similar networks to further differentiate their product by advancing yet more extreme views,” write the economists. “The effect might be only to radicalize, rather than moderate, their audience.”
The defense against this sort of extremism is to maximize the quantity of new sources so people end up with sane portfolios. There is no reason to believe that people with diversified news portfolios will tend toward extremism. The real problem is people who just rely on e.g. the NYTimes in order to oppose the view of the administration. Or the NYSun just to oppose the view of the NYTimes, etc.