I would claim that a more important factor is that many long-time subscribers (such as myself) grew weary of being spoon fed ideological pablum and dropped our subscriptions en masse. Jayson Blair is a symptom of a much more far-reaching problem at the Grey Lady (and other once-reputable newspapers).
It's convenient to blame the Internet and other alternative media; it avoids having to take a hard self-examination.
All newspapers have an editorial viewpoint; that is the purpose of the editorial page. However, when the newspaper taints its hard news reporting with that viewpoint, particularly when it reaches the extreme of inventing quotes and incidents to match, then it ceases to anything more than a propaganda organ.
The Times was once the paper that both dogmatic rightist and equally dogmatic leftist read to get the hard facts, even as both vehemently disagreed with the editorial. The Times had "all the news that's fit to print", even when that news was inconvenient for its editorial viewpoint; and it was respected and trusted for that.
Sadly, that has not been the case for many years.
The Times has fallen quite low, little better than the tabloids. It will take a good deal of work to bring it back. I see little sign of that happening.
-- Mark --