So what makes a paper a rag? My suspicion is that it's the same thing that makes a writer a 'hack.'
I edit a weekly newspaper and I work hard to hit some pretty high quality standards. For me, that means no wire copy, for one thing. Regardless of how well-written it is and how many sources the writer has employed, if it's not local it doesn't fit within my mandate. There are other publications my readers can access (if they choose) that include wire copy and regional news, including the award-winning Dallas Morning News, which I myself have written many articles for.
I consider material cheesy if it doesn't pass the smell test. I try not to cater to a small, elite group, for example. I don't just "round up the usual suspects" when I write. I put my best efforts into photography. I try to put some effort into fact-checking. I don't credit staff with material that came from someone else or a press release. I've seen newspapers take sly cheap shots at their competition and former staff members - and those crass efforts are usually rewarded with all the wrong people noticing them, embarrassing the editors who try to embarrass others.
In addition to these guidelines (which would look perfectly obvious to writers and editors who are well-trained) there are a number of universal rules of journalism, and those must be adhered to.
A comment on mediabistro.com about a magazine that used some articles with just one source irritated me. Ever seen those cookbooks for meals that have just three ingredients, or just four ingredients? No, it's not Cordon Bleu cooking, but sometimes, it's called for. If it's a good source and it's all you have time for in the bigger scheme of things for a straightforward preview story, then one source is better than none, and better than two poor ones.
And it all gets cancelled out if the writing and editing sucks.