Mark Van Pattern has written a piece on PBS's MediaShift titled, "How the Focus on Print Hurts Our Newspaper Site". His story is a common story I hear time after time from those in the newspaper business.
It's definitely no tangled bureaucracy, but even within this simple system you find conflicts holding the website back. The problem is that the different people in that system just have different priorities. As general manager, I want to see both a strong online presence and continued healthy print circulation. In contrast, the managing editor doesn't want to "hurt" the print edition by making the online edition too strong, fearing that it could tempt subscribers to abandon print.
Ultimately, this conflict is what's holding our online edition back. Without a full commitment from the managing editor, the website will never reach its full potential.
The digital age remains to be a dillemna for newspapers. Newspapers either have to ballance their resources between print and online media or put more focus on one over the other. I think it becomes even more difficult for publications when they find a large readership online yet the higher revenue remains on the print side. Although it may take some years, I still say that eventually online media will beat old media. It is just a matter of time.