Yeah I suppose it is. It's not like Blabber ever lists any new bands or what they are doing. Metal Injection sometimes has an "undiscovered bands of <region>" special but it never follows up with the bands unless they do something big. Bravewords has a few lesser known bands but they still have very few unsigned bands.
I see it as a failure of street press (I suppose you call the free rags with local news in them street press?). We used to have about 10 different street press rags on the street every week for free in Melbourne. I used to do design work for one of them back in the early 90's, it never proclaimed to be more than street press and local news but we got rid of 20,000 printed copies a week because people wanted to know what was going on locally. It would have been so easy to move that same format to the web, I even tried to at one stage, but because websites cost money, hosting cost money, everything cost money the editors all decided it was better to stay in print than convince sponsors to pay for a web service. Such sites would never have rivalled Blabber etc for global news but for local news and local bands they could have, instead most of them just absolved into nothing.