I may be biased but I think blogs are fine. The SE's will weed through the crap they way they always have and the blogs that have some built in quality will continue to rise.
Talk to some other bloggers, especially those who are into mass production. From what I can tell, within 6-9 months, they are living off of mostly image traffic and link trades. The quality SE searchs having long dropped by the wayside.
From what I can see, the SE's seem to be investing more into blogging than shying away from it so I think it will be strong for a number of years to come.
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