If you are a huge news agency that hates paying good money for photos, having every person on the planet equipped with a 5mp phone camera is great. Few people know what a photo is worth (or, more accurately, should be worth), and will likely GIVE you the photo, just to hear their name on TV or see it in print.
First of all, phone cameras are producing very good quality these days, and are well over a mere 5mp now. My LG G2 has 13mp, and I'm constantly amazed by the quality of the photos it produces.
Secondly, I think citizen photojournalism is extremely valuable, because citizens are everywhere, but photojournalists are not. As a result, citizens are able to capture things that would otherwise go uncaptured. It also democratizes news photography, because newspaper edits aren't cherry picking which photos the world gets to see. Smartphone photography allows citizens to have direct access to the world, without going through gatekeepers and intermediaries.
There are plenty of places where photojournalists are the only good source of photos, like war zones. Those photos have greater value because it is far more costly to capture those particular images. But do you really expect "a huge new agency" to "pay good money for photos" of run-of-the-mill events in your local town?
BTW, I don't think many people are out to simply "hear their name on TV". A lot of people do it simply because they know they have a photo that they think people need to see, like an illegal police shooting, or some other moment that no one else saw. If I captured a photo of some incident that I felt people should see, like a case of police abuse, or a terrorist bombing at a local marathon (like the Boston Marathon bombing in 2013), I would absolutely give the photo to whoever needed it, and I could care less about hearing my name on TV or seeing it on print. I would feel it's my duty as a human being and a citizen to have people see what I saw for he sake of justice!...I wouldn't try to pawn it for cash!
Yes, people get paid to take photos. But it doesn't necessarily mean that every photo anyone takes has a cash "worth". Contrary to what some people with cameras seem to think, a camera isn't a money printing machine. I like to get paid as a photographer as much as anyone. But I don't charge per photo. I charge an hourly or daily rate, and the client gets whatever I produce during that day. I just think that's a lot easier, and more fair, than deciding every photo that I've produced has a "worth".